Markets anxious as SBP mulls policy

Pakistan’s central bank is scheduled to meet on Friday (today) to, review developments in the domestic and global economy and, announce its key policy rate to maintain a balance between economic growth and inflation readings. Going forward, financial experts and market surveys strongly anticipate that the rate will remain unchanged at the current level of 15%. Speaking to the Express Tribune, Head of Research at Ismail Iqbal Securities, Fahad Rauf said, “The current objective of the government and central bank is to achieve economic stability – not the revival of growth.” “The limited availability of resources, mainly foreign exchange reserves and fiscal space, do not allow the government to push for a revival of growth at the present moment,” he explained. “With the floods having further aggravated the country’s economic slowdown, growth is estimated to stand at around 2% or less in the current fiscal year,” added Rauf. “The government had targeted a growth rate of 5% for FY23, as compared to 6% in the previous two consecutive fiscal years. The central bank, however, revised down its growth projection to 2% after the floods hit, as compared to 3-4% before the monsoon floods hit hard and resulted in estimated losses worth over $30 billion,” he noted.