Summary The State Bank of Pakistan kept the target policy rate at 6 percent.
KARACHI Web Desk) - Governor of the State Bank of Pakistan, Ashraf Wathra on Saturday stated that Pakistan will keep the target policy rate at 6 percent.
The decision was taken to support the rupee, which is among Asia’s worst performing currencies this quarter, the Bloomberg reported.
“Headline inflation is expected to reverse its declining momentum,” according to the bank’s e-mailed statement.
Average inflation will still remain below the target of 6 percent for the year ending June 30, with a subdued outlook for prices for oil and other major commodities, according to the statement.
The move was predicted by 21 of 22 economists in a Bloomberg survey, with one seeing a cut to 5.5 percent.
A weaker rupee risks exposing weaknesses masked by Pakistan’s record foreign-exchange reserves, leaving the nation vulnerable to a balance of payments crisis.
Prime Minister Nawaz Sharif needs to gradually start paying back the IMF for a $6.6 billion loan taken in 2013 to avert a balance of payments crisis.
