Islamabad, July 3, 2019: A Foreign Asset Manager posted the following about the SBP Governor on a roadshow in London.
“Citi Bank London arranged Reza Baqir’s meeting today with investors including asset managers, hedge funds & other institutions. RB went over & above his mandate to sell a story of institutional reform, austerity & most importantly credibility/independence of the SBP.
RB wants to rebuild the yield curve of PKR govt debt/bonds across various maturities (1, 2, 10yrs) to reduce re-finance risk/improve debt sustainability. A reiterated commitment of zero SBP borrowing (print money) to govt. He wants foreign investors to enter the local bond market.
Read More: SBP to announce monetary policy on Tuesday
RB mentioned how the SBP is looking to enhance its research/forecasting capabilities to give the market more guidance on its policy rationale. Investors received this positively given it gives them confidence on why/where interest rates are headed & subsequently the price of Bonds/T-Bills.
Investors also suggested there should be a more developed/liquid fx derivative market (Non-deliverable forwards etc.) across maturities so that they can hedge currency risk if & when they decide to invest in PKR Bonds/T-Bills & even equities.”