State Bank of Pakistan would announce Monetary Policy Statement (PMS) on Saturday (today). The central bank''s board of director would meet on Saturday and after reviewing the inflation and other statistics it would take decision on the policy rate. After the board meeting Governor SBP Syed Saleem Raza will announce monetary policy.
Economists are expecting that SBP would continue its tight monetary stance with no change in the policy rate. "Although we expect no change in the policy rate currently stood at 15 per cent in the monetary policy review, however we expect aggressive rate cuts in second and third quarter of calendar year 2009", economist Muzamil Aslam said. He said that it is expected that there would be at least 200bp cut in the policy rate in two episodes in 2009.
IMF delegates are expected to meet Pakistan''s financial managers in mid February for target assessment, whereas it is expected Pakistan will get the go ahead from the IMF, he added. "We believe this will be positive for the bond market and notwithstanding near term risk, an aggressive rate cut would be positive news for the equity market as well", Muzamil said adding that this should also improve the corporate earnings outlook especially for cyclical stocks.
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