SBP likely to hike interest rates by 100bps
KARACHI: The State Bank of Pakistan (SBP) is expected to jack up the interest rates further in the upcoming policy review next month to combat the rising inflation, a brokerage firm said Sunday.
“The monetary policy committee is set to commence its next meeting on April 4th and we expect the SBP to raise its policy rate by 100 bps (basis points) to 21% in this meeting,” said Arif Habib Limited (AHL) in a note.
The company conducted a survey (poll) to find out what the market is expecting in the upcoming monetary policy by taking feedback from various sectors.
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According to the survey poll results, 57.7% of the total respondents are of the view that the SBP will increase the policy rate, of which: 30.8% are expecting a rate hike of 100bps, 26.9% are foreseeing a rate hike of 200bps. 42.3% of the total respondents are of the view that policy rate will remain unchanged at 20%.
This month the policy rate was increased by a whopping 300bps to 20%. As per the Monetary Policy Committee, the decision was taken on inflation risks. Due to external and fiscal adjustments, the risks that were identified in the previous policy meetings, had materialised and become partially visible in the consumer price index (CPI) numbers. Moreover, the MPC also revised its CPI forecast for the year to 27-29% against earlier forecast of 21-23%.