KARACHI: The SBP’s Monetary Policy Committee (MPC) meeting has preponed and now it will be held on March 02, 2023 which was earlier scheduled for March 16, 2023.

“The Monetary Policy Committee of SBP will meet on Thursday, March 02, 2023 at SBP Karachi to decide about the Monetary Policy”, SBP said on Tuesday.

Later on, SBP will issue the Monetary Policy Statement through a press release on the same day.

MPC meeting preponed, will now be held on March 2, says SBP

Majority of experts and analysts expect 200bps to 300bps increase in the Policy Rate. In order to gauge the view on monetary policy outlook, Topline Research conducted a poll of key market participants on expectations over policy rate and key macro estimates.

As per the survey, 87 percent of the participants expect policy rate to increase by 200-300bps. Out of these, 64 percent expects 200bps increase, and 23 percent eyeing 300bps increase. Out of the remaining participants, 7.0 percent expects 100bps increase, whereas 4.0 percent eyeing above 300bps increase and only 1.0 percent expect no change.

In response to the question on average inflation expectations for FY23, 38 percent of the total participants believe that inflation is likely to average above 30 percent. On other hand, 29 percent and 23 percent of the participants expect inflation of 28-30 percent and 26-28 percent, respectively.

The remaining 10 percent of the participants expect inflation to average at 22-26 percent. According to the survey, 40 percent of the participants anticipate Policy Rate to remain in a range of 19-21 percent during the calendar year 2023. Around 21 percent expect it to be at 15-17 percent and 19 percent expect it to be 17-19 percent. On other hand, 3.0 percent expect it to be below 15 percent.

To highlight, since the last MPC meeting held on January 23, 2023, secondary market rates including T-Bill/ Kibor rates have gone up by around 200bps.

CPI inflation has also increased to 27.6 percent in January 2023 as compared to 24.5 percent in December 2022. Urban core inflation (Non Food Non Energy) stood at 15.4 percent in January 2023 versus 14.7 percent in December 2022. Rural Core Inflation increased to 19.4 percent in January 2023 against 19.0 percent in December 2022. CPI in February 2023 is likely to be 30-31 percent.

“Considering above factors, we also expect 200bps increase in upcoming MPC meeting considering higher inflation amid recent hike in fuel prices and rupee devaluation against US dollar where we see CPI inflation in FY23 to average at around 28 percent”, Muhammad Sohail, leading analyst and CEO of Topline Securities said.

Copyright Business Recorder, 2023