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As the PSX rises in anticipation of an SBP policy rate drop,

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The Pakistan Stock Exchange (PSX) persists in its upward trajectory as investors anticipate the State Bank of Pakistan’s (SBP) pronouncement on monetary policy.

The KSE-100 index presently stands at 92,016 points, having increased by approximately 1,100 points from the prior close of 90,859 points.

The recent increase in the PSX is attributed to the anticipated reduction in the policy rate during the Monetary Policy Committee (MPC) meeting.

United States Currency

The dollar appreciated against the Pakistani rupee by Rs0.07, now valued at Rs277.77.

Business leaders advocate for the government to lower the interest rate to 12.5 percent.

Former federal minister Gohar Ejaz recently stated that the government should promptly declare a winter package for the business.

At the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Regional Office, former provincial minister SM Tanveer and ex-Federal Minister for Commerce Gohar Ejaz endorsed significant economic reforms.

Business leaders implored the government to promptly lower the interest rate to 12.5%, with an additional reduction to 5% by December 31, 2024.

They have requested a specialised winter package to supply electricity to enterprises at a rate of Rs20 per unit to alleviate operational expenses.

Gohar Ejaz warned that Pakistan’s industrial sector is on the verge of collapse, characterising factories as “transforming into graveyards.”

He emphasised that sustaining elevated interest rates will impede growth, noting that nations in the region have effectively maintained their rates in the single digits. “He cautioned that the service sector will not endure if we forfeit the agricultural and manufacturing sectors.”

Ejaz attributed the erosion of economic stability on present economic policies, highlighting the ongoing devaluation of the currency and inflation resulting from capacity payments.

He implored the government to establish a definitive objective of a 10% annual increment in exports, forecasting that this trajectory will elevate Pakistan’s exports to $50 billion within five years. He emphasised the importance of reinstating the confidence of the business sector for the success of the privatisation agenda.

Former provincial minister SM Tanveer emphasised the necessity of incorporating FPCCI in policy-making procedures. “To transform Pakistan into an economic superpower, it is imperative to consult business leaders,” he asserted.

Regional Chairman Zaki Ijaz encouraged the government to acknowledge the importance of the industrial sector and emphasise policies that promote industrial activity to mitigate increasing unemployment.

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Robust activity lets PSX climb above 115,000 level again.

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On Friday, the Pakistan Stock Exchange (PSX) resumed its upward trend, crossing 115,000 points once more.

The PSX had strong action in the morning session, as the KSE-100 index increased by 1,000 points to 115,138.

The notoriously volatile PSX closed Thursday at 114,037 points, up 594 points.

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Meanwhile, in the interbank market this morning, the US dollar fell 7 paisas to Rs278.65 against the Pakistani rupee.

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SBP will announce monetary policy on January 27.

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The State Bank of Pakistan (SBP) will release its monetary policy on Monday.

The Monetary Policy Committee (MPC) of the SBP will convene on the first day of the following week to make decisions on monetary policy.

The Monetary Policy decision will be announced by Governor SBP Jameel Ahmad at a news conference on the same day after the MPC meeting, according to an official release.

In December, the central bank reduced policy rates by 200 basis points (bps) to 13 percent.

“In November 2024, headline inflation fell to 4.9 percent year on year, meeting the MPC’s estimates. This decrease was mostly caused by the ongoing decline in food inflation and the phasing out of the impact of the gas tariff increase in November 2023,” SBP stated in an official release.

“However, the Committee noted that core inflation, at 9.7 percent, is proving to be sticky, while consumer and business inflation expectations remain volatile.” To that end, the Committee restated its previous assessment that inflation may remain volatile in the short term before stabilizing within the target range.

“At the same time, growth prospects have slightly improved, as evidenced by a recent increase in high-frequency indicators of economic activity.” Overall, the Committee concluded that its approach of gradual policy rate decreases is keeping inflationary and external account pressures under control while promoting long-term economic growth.

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Finance Minister Meets With World Leaders at World Economic Forum in Davos

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During his attendance at the World Economic Forum in Davos, Switzerland, Finance Minister Muhammad Aurangzeb has met with officials of organisations and leaders of many nations.
Bangladesh’s Chief Advisor, Muhammad Younas, met with Mohammad Aurangzeb.
On the fringes of the World Economic Forum’s Annual Meeting 2025 Opening Banquet, there was an informal meeting.
Additionally, the Finance Minister met with Anwar Ibrahim, the Prime Minister of Malaysia.
Both leaders discussed economic cooperation and bilateral ties.
Muhammad Aurangzeb also had a meeting with Dp World’s Rizwan Soomro and Yuvraj Narayan.
They talked about how to strengthen Pakistan’s logistics and infrastructure systems to support trade.
“The Pakistani government is committed to advancing joint projects and values partnerships in both business-to-business and business-to-government cooperation,” the finance minister added.

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