Money Market, Forex and General News - 14-07-2009
Wednesday, July 15, 2009
MONEY MARKET
The State Bank of Pakistan is scheduled to target a T-bill auction of Rs45bn on 15 Jul-09. A maturity of Rs15bn is also scheduled for the subsequent day, translating into a net outflow of Rs30bn from the money market. Current money market rates suggest the cut-off to be even lower this time round.
All indicators leading up to the Monetary Policy on 25th July point to a cut in the policy rate. CPI has receded by ~12ppt since its worst level in Oct-08 (25%), National Savings Scheme rates were recently slashed ~175bp.
FOREX
There was a lot of volatility in the interbank forex market. There was supply in the market which pushed the USD/PkR parity downwards.
GENERAL NEWS
YoY CPI declined to 13.1% in June-09 from its high of 25% in Oct-08. Likewise, period average inflation settled at 20.8% for FY09 (Jul-Jun) compared to 12% in FY08, 2) Pakistan received the highest ever remittances of US$7.8bn in FY09, 21% higher YoY 3) Trade deficit for FY09 was lower by 19% YoY to US$17bn. Meanwhile on a MoM basis, inflation and trade deficit were both higher by 100bp and 70% to US$1.8bn. Looking ahead, we expect YoY inflation to continue a downward trend (we do not rule out single digit CPI in Oct-09) primarily due to base effect whereas trade deficit is expected to contract further by 11% YoY in FY10E. However continued upsurge in commodity prices remains the key risk to both inflation and trade deficit.
KSE board may okay re-launching of deliverable futures in 10 scrips As a reaction to the dip in trading volumes at the bourses, the KSE is expected to table for BoD approval the proposal for relaunching deliverable futures at the KSE. In the initial stage, 10 scrips will be traded on the counter.
The State Bank of Pakistan is scheduled to target a T-bill auction of Rs45bn on 15 Jul-09. A maturity of Rs15bn is also scheduled for the subsequent day, translating into a net outflow of Rs30bn from the money market. Current money market rates suggest the cut-off to be even lower this time round.
All indicators leading up to the Monetary Policy on 25th July point to a cut in the policy rate. CPI has receded by ~12ppt since its worst level in Oct-08 (25%), National Savings Scheme rates were recently slashed ~175bp.
FOREX
There was a lot of volatility in the interbank forex market. There was supply in the market which pushed the USD/PkR parity downwards.
GENERAL NEWS
YoY CPI declined to 13.1% in June-09 from its high of 25% in Oct-08. Likewise, period average inflation settled at 20.8% for FY09 (Jul-Jun) compared to 12% in FY08, 2) Pakistan received the highest ever remittances of US$7.8bn in FY09, 21% higher YoY 3) Trade deficit for FY09 was lower by 19% YoY to US$17bn. Meanwhile on a MoM basis, inflation and trade deficit were both higher by 100bp and 70% to US$1.8bn. Looking ahead, we expect YoY inflation to continue a downward trend (we do not rule out single digit CPI in Oct-09) primarily due to base effect whereas trade deficit is expected to contract further by 11% YoY in FY10E. However continued upsurge in commodity prices remains the key risk to both inflation and trade deficit.
KSE board may okay re-launching of deliverable futures in 10 scrips As a reaction to the dip in trading volumes at the bourses, the KSE is expected to table for BoD approval the proposal for relaunching deliverable futures at the KSE. In the initial stage, 10 scrips will be traded on the counter.
Labels: Economy and Business, Pakistan Economy
posted @ 9:11 AM,
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