Financial Risk Manager

Ways of Financial and Risk Management

Money Market and General Upadtes - 08-04-2011
Saturday, April 9, 2011

Money Market Updates:

Money market opened at 13.50 with a high of 13.70 with a low of 13.15. State Bank conducted an Open Market Operation today and injected Rs. 32.5 billion for 7 days at the rate of 13.21 percent due to which the market came to ease and closed at 13.15 percent.

General Updates:

After showing a relative ease for a couple of months, inflation jumped to 13.16 per cent last month because of high prices of food items and a partial increase in prices of petroleum products in domestic market and a slight rise in electricity tariff. Inflation had fallen from 15pc in December last year to 14.2pc in January and 12.91pc in February because of a government freeze on oil and electricity prices. The impact of overall increase in inflation last month was mainly because of food prices (56.46pc) and house rent (12.08pc), totaling 68.54pc.

Developing Asia, a diverse group of economies including China, India, Azerbaijan, Thailand and Fiji, is expected to grow 7.8 percent in 2011 and 7.7 percent in 2012, robust rates albeit slower than the 9 percent seen in 2010, Asian Development Outlook report. At the same time, inflation is expected to quicken to an average 5.3 percent this year from 4.4 percent in 2010, before easing to 4.6 percent in 2012. Some countries such as Vietnam and Pakistan could see inflation rates climb well into the double digits.

Pakistan’s foreign exchange reserves have declined to $17.637 billion on April 2, 2011, as compared to $17.9 billion during the previous week. The reserves held by central bank fell to $14.261 billion as compared to $14.54 billion during the last week, similarly, the reserves held by commercial banks other than SBP also declined to $3.376 billion as compared to $3.41 billion. The reserves touched a record high to $17.9 billion on March 26 on handsome inflows of remittances and exports earnings. Remittances sent home by overseas Pakistanis soared 20 percent in the first eight months (July-February) of the current fiscal year, in the wake of a tightening of noose around illegal channels, a stable rupee and contribution of charity money after flood ravages.

Labels: Economy and Business, Pakistan Economy