Summary Inflation has taken a downhill since December 2014
ISLAMABAD (Dunya News) – State Bank of Pakistan (SBP) on Saturday is going to announce monetary policy however, experts are not hopeful of any changes in interest rate.
A survey conducted by Dunya News shows that at least 12 experts out of 14 are confident that SBP would maintain six percent interest rate in the monetary policy. Since the start of 2015, the supreme bank has lessened interest rate by at least 3.5 percent.
After reduction in interest rate, private sector’s loans have gone downhill instead of a sharp rise. Statistics show that from July 2015 to October 2015, private sector has acquired loans worth Rs 13.5 billion.
If compared, Rs 45 billion loans were drawn during the same period in the last year. On the other hand, the government has acquired Rs 487 billion from commercial banks in first four months of the Fiscal Year (FY) 2015-16 to meet expenditures.
Experts have said that the SBP could revise its policy to incline commercial banks to private sector. It should be mentioned here that average inflation percentage in the ongoing FY fell below two percent due to falling crude oil prices.
It is worth mentioning here that inflation has taken a downhill since December 2014.
SBP’s Board of Directors will review economic issues in order to set interest rate for the next two months. The board will hold a meeting with Advisory Committee on Monetary Policy which will be followed by the decision.
