Karachi – The drastic cut of 100 basis points in the interest rate by the State Bank of Pakistan strengthened the Karachi Stock Exchange as the benchmark 100-index increased to 34443.31 points by gaining 416.72 or 1.22 percent till the mid day trading on Monday.
An expert says although fiscal deficit had been contained, the expected shortfall in FBR revenue and higher security-related expenditures were still challenging for the government to meet the deficit target. “The containment of fiscal deficit is encouraging and bodes well for credibility of policies and continuation of official and private capital inflows,” he said.
Earlier, SBP Governor Ashraf Mahmood Wathra announced the monetary policy and gave a number of reasons for the interest rate cut, but the low rate of inflation was the main reason for the decision. It revised the estimated inflation for the current financial year to 4.5 -5.5pc against an annual target of 8pc.
With High and Low of 34511.14 and 34026.59 respectively, the volume traded in the market was 151,898,810 and in terms of value was 10,526,747,870. Although the trade deficit had risen in the first half of FY15 over the same period of FY14, it came down in November and December, he added. Moreover, considerable foreign exchange inflows had contributed to an upward trajectory in foreign exchange reserves.
