Market divided over possibility of rate cut on 18th
KRARCHI: The Ramazan-driven price spiral could take up the food basket inflation to its peak in March which may not allow the State Bank of Pakistan (SBP) to take any significant cut in the interest rate, said market sources. The induction of Finance Minister Muhammad Aurangzeb, who was the CEO of Habib Bank Ltd and a regular participant in policy meetings on finance during the caretaker government, did not change the sentiments of the market, instead, the possibility of interest rate cut in the next monetary policy was more in discussion. The central bank is scheduled to announce the monetary policy on March 18 and once again sizeable stakeholders are willing to see a cut in the interest rate like the previous monetary policy in February. The previous monetary policy was greatly influenced by the 28.7 per cent inflation in January due to a rise in electricity, petroleum and gas prices. This time the food basket, due to Ramazan, is standing tall against the rate cut as the market believes the inflation may not come down like in February when it decelerated to 23.1pc.