Navigating volatility

KARACHI: Pakistan's macroeconomic environment remains fragile due to persistent domestic and geopolitical shocks. The PSX has suffered substantial contractions in market capitalisation due to these mounting uncertainties. Meanwhile, headline inflation sits at 10.3%, while the SBP has rightly tightened monetary policy by raising the policy rate to 12%. Retail investors, facing market volatility amid a region in turmoil, need somewhere safe to put their money. Leaving capital entirely exposed in a bearish stock market erodes purchasing power rapidly. This policy rate change safeguards bank deposits and fixed-income mutual funds, allowing ordinary savers to hedge against wealth erosion. To build economic resilience, the government must coordinate closely with other governmental agencies to curb non-productive expenditures. Regulators should further speed up investor education initiatives so retail investors can optimise asset allocation during cyclical downturns. Ultimately, shielding public savings from inflationary pressures remains fundamental to restoring long-term market confidence. Shehroze Kaleem Chakwal