The rise in April’s Consumer Price Index (CPI) has been described by investors as “out of expectations” and it is likely to change their investment strategy.
The CPI for the previous month was announced at 9.18 per cent which immediately increased the yield on three-year Pakistan Investment Bonds (PIBs) by 30 basis points.
“We were expecting slight increase in the main inflation but over 9pc is out of expectation which pushed the yield on PIBs up,” said S.S. Iqbal, a fund manager.
He said higher CPI could change the investment strategy as the investors were hoping for a cut in the interest rate due to low inflation. Now the situation seems slightly different and interest rate could remain unchanged.