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Depreciating rupee fueling inflation

  There is no doubt that Pakistan suffers from cost pushed inflation. Any hike in the global prices of crude oil, crude-based raw materials and edible oil push inflation. The impact becomes even more pinching when Pak Rupee faces erosion in value against other major currencies. At present Rupee value is on the decline due to erosion of Pakistan’s foreign exchange reserves. Though, the central bank has been intervening regularly …

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High interest rates stagnate growth, increase inflation

  While announcing its monetary policy for next two months, the State Bank of Pakistan (SBP) decided last month to keep the benchmark interest rate unchanged at 10 percent. The analysts see no rationale to maintain the discount rate at 10 percent by the central bank as all fundamentals are in favor of a reduction in the interest rate. So far as inflation is concerned, the average Consumer Price Index …

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Monetary Policy: likely impact on inflation and interest rate

  In the last Monetary Policy decision, discount rate has been maintained at 10 percent against expectations that interest rate will reduce at the back of reduction in CPI, average CPI recorded at 8.6 percent in FY14. With declining trend of inflation and projections of SBP for single digit inflation, discount rate is expected to reduce further. For FY15, CPI is expected to remain between 7.5 percent and 8.5 percent. …

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Investment options to counter inflation

  Pakistan has been plagued with inflation for a long time, which creates pressure to meet day-to-day household expenses in limited income. It is extremely important that an additional source of income is available, which cushions monthly expenses. Investment management has long been carried out for additional income, however, in an inflationary environment where cost of living is increasing year-on-year, having and executing a plan for investments of residual funds …

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Analyzing investment avenues

  At a time when inflation is at its highest and cost of living is squeezing the pocket month-on-month, savings need to be placed to ensure that additional income can offset high cost of living. Investments by individuals depend on the knowledge of investment avenues. The simplest investment is keeping money in a savings account where more complex invest structures include mutual funds, equity and money market investments. The stock …

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