LAHORE: In wake of increasing gap between inflation and interest rates and depreciating regional currencies, the State Bank of Pakistan (SBP) is likely to further cut rate in the next monetary policy,
According to the experts, the policy rate may be cut by 50-100bps in fiscal year 2016. However, recent gas tariff hike and weaker rupee may compel SBP to delay any monetary easing decision to later MPS.
Pakistan Consumer Price Index has slipped another notch to 1.72 percent YoY in August-15 vs. 1.8 percent in July-15. The reading is lowest after July-03, but slightly above the street consensus.
On month on month basis, CPI index has increased by 0.24 percent. Food inflation has clocked in at 0.34 percent MoM (vs. 0.05 percent in July-15), in which Perishable food prices have increased by 3.7 percent while Non-perishable food prices witnessed a fall of 0.2 percent. Housing index also inched up by 0.3 percent, on the back of 1.47 percent higher electricity index.
Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 4.0 percent on YoY basis in August-15 as compared to 4.1 percent in the previous month and by 7.9 percent in SPLY.
