KARACHI: A majority of analysts polled by Topline Securities said they expect no change in the benchmark interest rate in the monetary policy announcement due on March 8.

A detailed note issued by the brokerage on Wednesday showed 53 per cent of the polled analysts expect the status quo while 44pc of them believe the policy rate will go up. Only 3pc of the participants foresee a rate cut.

The last monetary policy announced on Jan 24 maintained the interest rate at 9.75pc — a decision that was in line with “forward guidance” that the SBP had previously provided.

According to analyst Umair Naseer, yields on treasury bills and Pakistan Investment Bonds in the secondary market have gone by 25-30 basis points since Feb 18. The rise is because of a sharp spike in commodity prices, concerns over inflation and the current account outlook.

Similarly, yields on the Eurobond with maturities of 2024-27 have also risen by 200-300 basis points.

“Though commodity prices have risen sharply, we anticipate no change in the upcoming monetary policy keeping in view the State Bank of Pakistan’s focus on sustaining economic recovery and its last forward-looking guidance,” said Mr Naseer.

“The decision to not increase petroleum prices till June 2022 may also provide some cushion to the inflation outlook,” he added.

About 24.2pc of the analysts polled said they expect the rate to go up by 50 basis points while 14.3pc of them anticipated a hike of 25 basis points.

Published in Dawn, March 3rd, 2022

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