Flash Note: Pakistan Economy: Contrary to expectations SBP maintains policy rate at 6%
- State Bank of Pakistan (SBP) in its monetary policy announcement maintained its Policy Rate at 6%, which was contrary to expectations. As per survey conducted by Bloomberg, 13 out of 22 economist had forecasted 25bps hike in policy rate while 6 economist predicted 50bps hike. The remaining 3 economist anticipated a status quo.
- To recall, SBP had raised rates by 25 basis points to 6% in its January 2018 monetary policy announcement.
- SBP expects inflation to remain benign going forward on back of moderate food inflation outlook where it expects CPI inflation to remain below the FY18 target of 6% despite the recent devaluation and its second round effects.
- SBP has cautioned that financing the current account remains challenging but hinted at capital flows where it believes that the govt. plans to mobilize funding will play a pivotal role to maintain adequate foreign exchange reserves. Further, it expects the recent devaluation to gradually impact trade numbers in coming months.
- We are maintaining our expectations that SBP will increase interest rates in order to curb spiraling aggregate demand and imports of the country.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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