Latest news with #AhmadMobeen
Malaysian Reserve
05-05-2025
- Business
- Malaysian Reserve
Indonesia seen to cut rate twice this year amid US tariff talks
INDONESIA'S central bank is expected to resume monetary easing after holding its rate unchanged for three consecutive meetings, moving to bolster economic growth against the backdrop of rising tariffs and trade policy uncertainty. Economists predicted a quarter-point reduction in Bank Indonesia's benchmark rate to 5.5% by the end of the second quarter, according to the latest Bloomberg survey. They see a further 25-basis point cut in the third quarter, which will lead the terminal rate to 5.25% toward the year-end. Consumer inflation could also be more moderate than expected. The headline gauge is projected to be 1.8% for the second quarter, lower than the earlier forecast of 1.9%, which should pare down the full-year print to 2% from 2.1%. The planned 32% US tariffs on Indonesian goods prompted economists to lower economic growth forecasts this year to 4.8% from 5% previously. 'Key downside risks to growth could stem from the implementation of the higher-band reciprocal tariff on Indonesia after the current 90-day pause', said Lloyd Chan, strategist at MUFG bank. The Indonesian government is currently negotiating with Washington to avert the tariffs that are seen to hit the exports sector. In an early warning sign of the tariff fallout, a measure of Indonesian manufacturing activity fell to its lowest since 2021, with factories cutting production and jobs in April. Indonesia has pledged to increase its energy and agriculture imports from the US, as well as increase cooperation for the supply of critical minerals in the trade talks. Still, the government underlined it will put forward national interests as the US pushes for Indonesia to deregulate investments and ease market access. The Indonesian rupiah fell to an all-time low against the dollar last month, triggered by a selling spree in global financial assets as an impact of rising trade frictions around the globe. 'The rupiah, already near its lowest level since the Asian financial crisis, may come under additional pressure, and potentially require further intervention by Bank Indonesia,' said Ahmad Mobeen, senior economist at S&P Global Market Intelligence. –BLOOMBERG
Business Times
05-05-2025
- Business
- Business Times
Indonesia seen to cut rate twice this year amid US tariff talks
[JAKARTA] Indonesia's central bank is expected to resume monetary easing after holding its rate unchanged for three consecutive meetings, moving to bolster economic growth against the backdrop of rising tariffs and trade policy uncertainty. Economists predicted a quarter-point reduction in Bank Indonesia's benchmark rate to 5.5 per cent by the end of the second quarter, according to the latest Bloomberg survey. They see a further 25-basis point cut in the third quarter, which will lead the terminal rate to 5.25 per cent towards the year-end. Consumer inflation could also be more moderate than expected. The headline gauge is projected to be 1.8 per cent for the second quarter, lower than the earlier forecast of 1.9 per cent, which should pare down the full-year print to 2 per cent from 2.1 per cent. The planned 32 per cent US tariffs on Indonesian goods prompted economists to lower economic growth forecasts this year to 4.8 per cent from 5 per cent previously. 'Key downside risks to growth could stem from the implementation of the higher-band reciprocal tariff on Indonesia after the current 90-day pause', said Lloyd Chan, strategist at MUFG bank. The Indonesian government is currently negotiating with Washington to avert the tariffs that are seen to hit the exports sector. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up In an early warning sign of the tariff fallout, a measure of Indonesian manufacturing activity fell to its lowest since 2021, with factories cutting production and jobs in April. Indonesia has pledged to increase its energy and agriculture imports from the US, as well as increase cooperation for the supply of critical minerals in the trade talks. Still, the government underlined it will put forward national interests as the US pushes for Indonesia to deregulate investments and ease market access. The Indonesian rupiah fell to an all-time low against the US dollar last month, triggered by a selling spree in global financial assets as an impact of rising trade frictions around the globe. 'The rupiah, already near its lowest level since the Asian financial crisis, may come under additional pressure, and potentially require further intervention by Bank Indonesia,' said Ahmad Mobeen, senior economist at S&P Global Market Intelligence. BLOOMBERG
Reuters
02-05-2025
- Business
- Reuters
Pakistan central bank likely to hold policy rate amid geopolitical tension, inflation concern: Reuters poll
KARACHI, May 2 (Reuters) - The State Bank of Pakistan is set to hold its key interest rate at 12% on Monday, a Reuters poll showed, having paused a run of cuts at its last policy meeting to the surprise of market watchers due to geopolitical tension and outlook for inflation. The bank's Monetary Policy Committee will meet in the shadow of an attack in Kashmir last week in which gunmen that India said were Pakistan-based killed 26 mostly Indian tourists. Pakistan has said it has " credible intelligence" that India plans to respond with military action. India has said only that it will pursue and punish the attackers. Since the attack on April 23, the spread between Pakistan and U.S. debt has widened nearly 200 basis points to more than 850 bps, meaning Pakistan's cost of borrowing has increased. (.JPMEGDPAKR), opens new tab In a poll of fourteen analysts and investors, nine said they expected the bank to hold its policy rate. Three said they expected a 50 bp cut and two called for a 100 bp cut. The bank had cut the rate by 1,000 basis points since June from an all-time high of 22% before holding it in March, citing the risk of price rises including from increased U.S. tariffs. Still, analysts expect the bank to resume cuts this year to encourage lending and stimulate economic growth. For now, the bank will likely maintain a wait-and-see approach due to a fluid trade picture, persistent core inflation and an upcoming International Monetary Fund review, said S&P Global Market Intelligence senior economist Ahmad Mobeen. The IMF will review a $7 billion bailout loan programme on May 9 and decide whether to disburse the first $1 billion. It will also discuss a new $1.3 billion climate resilience loan. The inflation rate fell to 0.7% in March, its lowest in nearly a decade. The Ministry of Finance pegs April inflation at 1.5% to 2% and the central bank forecasts average inflation to be in the range of 5.5% to 7.5% for the fiscal year ending June. A "measured" cut on Monday could support economic recovery without undermining stability given the large gap between interest rates and inflation, and "improving but vulnerable external accounts", said Sana Tawfik, head of research at brokerage Arif Habib. Increased foreign exchange reserves - ideally to the central bank target of $14 billion in June - are necessary before resuming monetary easing, said Al Meezan Investments head of research Amreen Soorani. The current $10.5 billion covers imports for less than two months.
Express Tribune
08-03-2025
- Business
- Express Tribune
Analysts predict seventh rate cut amid low inflation
Listen to article Most analysts predict a seventh consecutive rate cut by Pakistan's central bank on Monday, amid the first International Monetary Fund (IMF) review of a $7-billion bailout at the time of the lowest inflation in nearly a decade. The cash-strapped South Asian nation could unlock a further tranche of funding if the IMF review is approved before the budget is unveiled in June, as it pursues economic reforms mandated by the IMF programme. The central bank's easing cycle, one of the most aggressive among emerging markets, follows a series of rate cuts totalling 1,000 basis points (bps) over six months that took the key rate to 12%, down from a record high of 22% in June. The latest cut, of 100 bps, was in January. February inflation stood at a near-decade low of 1.5%, largely due to a high base a year ago. A Reuters survey of 14 analysts suggests that the central bank may further reduce rates, with a median forecast for a cut of 50 bps. Of the 10 analysts expecting a rate cut, three estimated its size at 100 bps, one at 75 bps, and six at 50 bps. The rest saw no change. Most analysts expecting a rate cut believe the central bank will stop when rates hit 10.5% to 11%, due to a potential rise in inflation. They anticipate a moderate rise from March to May. Inflation will "bottom out" in the year's first quarter before gradually rising, said Ahmad Mobeen, senior economist of S&P Global, who anticipates average inflation of 6.1% for 2025. Despite the "sharp drop" in the Consumer Price Index (CPI), he said urban core inflation, indicative of price pressures, remained high, at 7.8%. "The S&P Global HBL Pakistan Manufacturing PMI also indicates rising input costs, pushing manufacturers to hike prices in February 2025 at the fastest pace since October 2024," he added. At its last policy meeting, the central bank kept its forecast of full-year GDP growth at 2.5% to 3.5%, and predicted faster growth would help boost foreign exchange reserves that had been lacklustre. "While GDP posted 0.9% growth in the first quarter of fiscal year 2025, large-scale manufacturing remains in negative territory, and production has yet to gain momentum," said Sana Tawfik, head of research at Arif Habib Limited.
Reuters
07-03-2025
- Business
- Reuters
Pakistan eyes seventh straight rate cut amid decade low inflation, IMF review
KARACHI, March 7 (Reuters) - Most analysts predict a seventh consecutive rate cut by Pakistan's central bank on Monday, amid the country's first International Monetary Fund (IMF) review for its $7 billion bailout and near-decade low inflation. Pakistan's central bank's current easing cycle, one of the most aggressive among emerging markets, follows a six-month series of rate cuts totalling 1000 basis points (bps), which brought the key rate down from a record high of 22% in June to 12%, with the latest 100 bps cut in January. As Pakistan undergoes economic reforms mandated by the IMF programme, it stands to secure additional funding from the global lender, pending the ongoing review. The cash-strapped South Asian nation could unlock a tranche of funding if the ongoing review is approved, ahead of its annual budget presentation looming in June. Inflation for the month of February clocked in at a near decade low of 1.5%, largely due to a high base a year-ago. A Reuters survey of 14 analysts suggests that the central bank may further reduce rates, with a median forecast of a 50 bps cut. Of the 10 analysts who expect a rate cut: three anticipate a 100 bps cut, one a 75 bps cut, and six a 50 bps cut. The remaining four analysts predict no change. Most analysts predicting a rate cut believe the central bank will stop reductions when rates hit 10.5-11%, due to a potential inflation rise and anticipate a moderate rise in inflation from March to May. Ahmad Mobeen, senior economist of S&P Global predicts inflation will "bottom out" in Q1, then gradually rise. He anticipates a 6.1% average inflation for 2025. Despite the "sharp drop" in the Consumer Price Index (CPI), he notes that urban core inflation, indicative of ongoing price pressures, remains high at 7.8%. "The S&P Global HBL Pakistan Manufacturing PMI also indicates rising input costs, pushing manufacturers to hike prices in February 2025 at the fastest pace since October 2024," he said. In the last policy meeting, the bank maintained its forecast of full-year GDP growth at 2.5%-3.5% and predicted faster growth would help boost the country's previously struggling foreign exchange reserves. "While GDP posted 0.9% growth in 1QFY25, large-scale manufacturing remains in negative territory, and production has yet to gain momentum. The transmission of lower rates to economic activity is yet to be seen," said Sana Tawfik, head of research at Arif Habib Limited. She added that the target is only possible if industrial activity picks up and agricultural output improves.
