ECB should keep rates at 2% unless new shocks hit, IMF says
The ECB has cut rates by two percentage points since June 2024 but signalled a pause for this month, even if financial investors still see another cut to 1.75% later this year.
'Risks around euro zone inflation are two-sided,' Kammer told Reuters on the sidelines of the ECB Forum on Central Banking in Sintra, Portugal.
'This is why we think the ECB should stay the course and not move away from a 2% deposit rate unless there is a shock that materially changes the inflation outlook. Right now we don't see anything of such magnitude.'
ECB will keep doing all is needed to meet inflation goal, Nagel says
Part of the reason why the IMF is taking a different view than markets is because it anticipates higher inflation next year than the ECB.
The ECB projects price growth falling below its 2% target for 18 months from the third quarter, bottoming out at 1.4% in early 2026.
'For next year, we see inflation at 1.9%, which is above the ECB's own projections, partly because we take a different view on energy prices,' Kammer said.
While most ECB policymakers see inflation risks balanced, there is an increasing group, including Finland's Olli Rehn, Belgium's Pierre Wunsch and Portugal's Mario Centeno, who have all warned about the risk of inflation falling too low.
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Express Tribune
a day ago
- Express Tribune
PSX ends flat below 146.5k on profit-taking
The Pakistan Stock Exchange (PSX) closed marginally lower on Friday as profit-taking in the latter half of the session erased early gains amid concerns over mounting losses of state-owned enterprises (SOEs), the International Monetary Fund's (IMF) next review for loan tranche and the falling global crude oil prices. The KSE-100 index, after touching intra-day high of 147,534, retreated to settle slightly below 146,500, down 38 points. Engro Fertilisers, Lucky Cement and Engro Holdings supported the index while Oil and Gas Development Company (OGDC), UBL and Pakistan Petroleum Limited (PPL) weighed on sentiment. "Stocks closed flat amid concerns over SOE losses and next IMF review for the release of third tranche," noted Ahsan Mehanti, MD of Arif Habib Corp. Worries about the unmet IMF conditions for provincial tax collection and falling global crude oil prices fueled the negative close at the PSX, he said. At the end of trading, the benchmark KSE-100 index posted a decline of 37.67 points, or 0.03%, and settled at 146,491.63. Arif Habib Limited (AHL), in its market review, noted that the KSE-100 closed the week flat on Friday, capping gains at 0.7% week-on-week. Some 49 stocks advanced and another 49 declined, where Engro Fertilisers (+3.25%), Lucky Cement (+2.31%) and Engro Holdings (+1.63%) were the top contributors to index gains. On the flip side, OGDC (-2.57%), UBL (-1.34%), and PPL (-2.13%) dragged the index lower, it said. AHL mentioned that the Economic Coordination Committee had approved the setting up of an industrial estate on 4,800 acres of unused Pakistan Steel Mills' land. For the coming week, the resistance for the index is seen near 148,000 with support around 145,000, it added. Topline Securities, in its report, commented that the KSE-100 opened on a positive note and rose to intra-day high of 1,005 points. However, during the latter hours, profit-taking was observed as jittery investors booked profits before the weekend. The top positive contribution to the index came from Engro Fertilisers, Lucky Cement, Engro Holdings, Meezan Bank and Airlink Communication as they contributed 512 points. On the other hand, OGDC, UBL, PPL, Hub Power and Mari Petroleum lost ground, pulling the index down by 499 points, it said. Traded value-wise, Airlink (Rs3.38 billion), OGDC (Rs2.32 billion), PSO (Rs1.53 billion), Lucky Cement (Rs1.30 billion) and NBP (Rs1.11 billion) dominated the trading activity, Topline added. Muhammad Hasan Ather of JS Global said that the KSE-100 closed 38 points down after trading within a tight range throughout the session. Activity remained range bound, driven by upbeat corporate earnings, and investor sentiment was underpinned by optimism about Pakistan's improving macroeconomic indicators and recent credit rating upgrades, he said. Despite intra-day volatility, the market held firm, reflecting growing confidence in fiscal reforms and economic recovery. Going forward, investor focus will remain on earnings season, policy continuity and external inflows, with expectations of a gradual upward trend in equities amid improving fundamentals, the analyst added. Overall trading volumes were recorded at 473.6 million shares, compared with the previous tally of 647.1 million. The value of shares traded was Rs32.9 billion. Shares of 479 companies were traded. Of these, 226 stocks closed higher, 219 fell and 34 remained unchanged. Aisha Steel Mills was the volume leader with trading in 30 million shares, gaining Rs0.55 to close at Rs13.47. It was followed by Media Times with 21.7 million shares, gaining Rs0.39 to close at Rs3.62 and Airlink Communication with 19.9 million shares, gaining Rs9.76 to close at Rs168.04. Foreign investors sold shares worth Rs154 million, the National Clearing Company reported.
Business Recorder
a day ago
- Business Recorder
PSX ends flat
KARACHI: The Pakistan Stock Exchange (PSX) closed almost unchanged on Friday, as a lack of fresh triggers and persistent macroeconomic concerns kept investors sidelined. The benchmark KSE-100 Index ended the day at 146,491.63 points, down 37.67 points or 0.03 percent from the previous close of 146,529.31. The index fluctuated between an intraday high of 147,534.41 points and a low of 146,269.59 points, eventually settling marginally lower. BRIndex100 closed at 14,962.21 points, down 31.99 points or 0.21 percent, with total turnover of 364.59 million shares. BRIndex30 shed 312.23 points, or 0.74 percent, to close at 42,078.55 points, on a total volume of 147.17 million shares. Profit-taking in oil and energy stocks offset selective buying in banking and technology counters. 'Stocks closed flat amid concerns for SOEs' losses and the IMF's next review for release of the third tranche under the EFF. Concerns for unmet IMF conditions for provincial tax collection, and falling global crude oil prices played a catalyst role in the negative close at PSX,' commented Ahsan Mehanti, Director at Arif Habib Corporation. Market capitalization slipped slightly to Rs 17.469 trillion, compared to Rs 17.491 trillion on Wednesday. Overall trading volumes also moderated, with the ready market turnover at 473.6 million shares against 647.09 million shares in the previous session. The traded value of shares fell to Rs 32.88 billion from Rs 40.89 billion in the prior session. Aisha Steel Mills led the volume chart with over 30 million shares, closing marginally higher at Rs 13.47. Media Times Ltd followed with 21.7 million shares, ending the day at Rs 3.62. Air Link Communication ranked third, closing at Rs 168.04 with 19.88 million shares traded. Hoechst Pakistan Limited and Unilever Pakistan Foods Limited were the top gainers of the day, with share prices increasing by Rs 280.91 and Rs 41.00 to close at Rs 3,506.71 and Rs 32,000.00, respectively. On the flip side, PIA Holding Company LimitedB suffered the steepest decline, losing Rs 856.90 to close at Rs 27,814.97, while Nestle Pakistan Limited fell by Rs 103.97 to Rs 8,654.09. Out of 479 active scrips, 219 closed in the red, 226 ended higher, and 34 remained unchanged, indicating a cautious and range-bound trading environment. The BR Automobile Assembler Index finished at 23,880.46 points, gaining 216.46 points or 0.91 percent, with 6.21 million shares traded. The BR Cement Index advanced to 11,692.16 points, up 85.86 points or 0.74 percent, on a turnover of 25.44 million shares. In contrast, the BR Commercial Banks Index slipped 65.44 points, or 0.15 percent, to close at 43,619.93, on 40.28 million shares. The BR Power Generation and Distribution Index fell sharply by 240.95 points, or 1.06 percent, to settle at 22,405.13, with 16.77 million shares traded. The BR Oil and Gas Index also came under pressure, losing 189.78 points, or 1.45 percent, to close at 12,871.27, with a turnover of 24.58 million shares. Meanwhile, the BR Technology & Communication Index inched up by 8.25 points, or 0.25 percent, closing at 3,340.99, on an active volume of 90.80 million shares. According to JS Global's Muhammad Hasan Athar, the index traded within a tight range throughout the session, with activity remaining largely range-bound on the back of upbeat corporate earnings. He noted that investor sentiment was supported by optimism over Pakistan's improving macroeconomic indicators and recent credit rating upgrades. Despite intraday volatility, he said, the market held firm, reflecting growing confidence in fiscal reforms and the broader economic recovery. Copyright Business Recorder, 2025
Express Tribune
2 days ago
- Express Tribune
Gaps in anti-laundering efforts: IMF
The International Monetary Fund (IMF) has observed that Pakistan is not effectively using data on the ultimate real owners of companies, creating hurdles in disrupting corruption-related laundering schemes and checking front companies from securing government contracts. The global lender's draft report on the Governance and Corruption Diagnostic Assessment revealed major flaws in the effective implementation of the country's beneficial ownership regime. The IMF found "little evidence of routine coordination" between the Securities and Exchange Commission of Pakistan (SECP) and investigation agencies for exchanging and using beneficial ownership data in financial investigations. However, Pakistani authorities disagreed with the IMF's findings, stating that agencies were using beneficial ownership data, except in the case of Designated Non-Financial Businesses and Persons (DNFBPs). Pakistan tightened its beneficial ownership rules about eight years ago as part of Financial Action Task Force (FATF) conditions. However, as in many other cases, implementation remains far below the desired goals. The IMF stated that effective use of beneficial ownership information in financial investigations requires regular exchanges between the SECP, the State Bank of Pakistan (SBP), the Federal Board of Revenue (FBR), commercial banks, money service providers, and investigation agencies. The IMF's diagnostic mission recommended that Pakistan institutionalise a multi-agency working group to review beneficial ownership data in support of corruption investigations. The IMF noted that Pakistan's beneficial ownership framework is an important foundational tool, but weaknesses in registry implementation, verification, enforcement, and inter-agency access reduce its impact. "Addressing these challenges will be essential to ensuring that beneficial ownership transparency plays a meaningful role in the identification and disruption of corruption-related laundering schemes," the global lender observed. It added that access to accurate and timely beneficial ownership data is essential not only for detecting illicit financial flows but also for uncovering conflicts of interest in public procurement, particularly when public officials or their close associates have undisclosed stakes in bidding firms. Pakistani authorities said that, as part of effective inter-agency coordination, the SECP has provided direct access to its beneficial ownership database to investigation agencies. They said the Financial Monitoring Unit (FMU) was regularly using the data to analyse suspicious transactions. In 2018, the SECP directed companies to collect information about their real owners to address FATF concerns about transparency in company ownership structures. The directions had been given to uncover layers of secrecy hiding ultimate beneficial owners. All companies with legal persons as members or shareholders are required to obtain and maintain information from their members and shareholders about the ultimate beneficial owners. The minimum information required includes the owner's full name, father's or husband's name, NIC/NICOP/passport number, nationality, country of origin, email address, usual residential address, the date on which the name was entered into the register, and the date and reason the person ceased to be the beneficial owner. Section 453 of the Companies Act 2017 also requires every company officer to endeavour to prevent fraud and offences of money laundering, including predicated offences under the Anti-Money Laundering Act 2010, in relation to the company's affairs. However, the IMF found serious gaps in the implementation of these laws and rules, hindering the disruption of illicit money flows. Global bodies agree that collusive practices can only be mitigated by exposing front companies used to siphon public funds and by supporting fair competition in government contracting. The IMF said that ensuring contracting authorities, integrity bodies, and investigative agencies can effectively access and cross-reference beneficial ownership data with procurement records is critical to advancing governance reform and restoring public trust. The effectiveness of financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) in detecting and reporting corruption-linked transactions remains limited, the IMF stated. Pakistan's legal and regulatory framework requires reporting entities — including banks, money service businesses, and DNFBPs — to implement risk-based customer due diligence, conduct enhanced due diligence on politically exposed persons (PEPs), and file suspicious transaction reports (STRs). However, implementation is uneven and often inadequate in addressing high-risk areas associated with corruption. Pakistani authorities said some state agencies were actively using the SECP's online beneficial ownership database to enrich financial intelligence. The FMU continues to advocate improved access to beneficial ownership data for key stakeholders and stronger implementation of anti-money laundering obligations by reporting entities through targeted guidance, training, and inter-agency collaboration. Financial institutions have made notable progress in applying risk-based customer due diligence and conducting enhanced due diligence on politically exposed persons (PEPs). However, challenges remain, particularly in the DNFBP sector, where the level of technical capacity, compliance culture, and supervisory coverage vary, according to Pakistani authorities.
