state bank announces monetary policy

KARACHI: The State Bank of Pakistan on Saturday announced the new monetary policy for the next two months reducing the interest rate further by 50 basis points. The central bank reduced interest rate by 0.5 percent and brought it down to six percent.The State Bank of Pakistan noted year-on-year headline CPI inflation to have decelerated to 1.7 percent in August 2015 from 7.0 percent in August 2014. Following its declining trend of the past several months, the 12-month moving average CPI inflation came down to 3.6 percent in August 2015 from 8.4 percent in August 2014. A press release from the State Bank noted, ‘With better law and order situation, investor and consumer confidence is improving. After recording a growth of 3.3 percent, Large-scale Manufacturing is expected to gain further traction at the back of improvement in energy supplies. Implementation of infrastructure development and energy projects under China Pakistan Economic Corridor would further enhance the improving investment environment. Therefore, there is anticipation of higher economic activity in FY16 which is expected to boost credit uptake.’