National interest not capital market top priority

A source on the condition of anonymity said that most of the members of the KSE and the financial managers rue over their decision to invite the governor because none of their demands received any sympathetic consideration from the SBP boss.

It is being speculated that SBP may increase discount rates further by 100-150 bps at least in the short term to adjust the exchange rates with depreciating rupee against dollars. And deteriorating economic environment due to twin deficits, both trade & fiscal, coupled with adverse developments occurred at external front over a last two months, SBP would need to continue tight monetary policy further to stabilize national currency as well as curb inflationary pressures in the current fiscal.

 A press note issued by SBP here on Monday said that Dr Shamshad Akhtar said that despite multiple shocks, the country’s economy managed to record economic growth of 5.8%, which is above the average growth trend of 5% observed between FY91 and FY08.

Dr Akhtar said the stock market of the country showed a remarkable performance since 2000 in terms of market capitalization and growth of indices. The KSE registered more than 1000 percent increase in market capitalization and over 900 percent increase in the index since FY00. The index, which stood at 1,520 points, with total market capitalization of Rs. 394 billion ($6.5 billion) in FY00, grew by leaps and bounds in the last few years and reached the level of 15,676.34 points by April 18, FY08, with total market capitalization of Rs. 4,790.98 billion ($75 billion). “This growth surpasses the market performance of major economies in the region, as a result of which KSE-100 index was included in the MSCI Emerging Markets Index from June 2006,” she added.