Vastavam web: Pakistan’s central bank kept its main policy interest rate unchanged at 5.75 percent on Friday, citing steadily rising economic growth.“Economic activity is strong,” the State Bank of Pakistan said in a statement. “This implies that the prospects of achieving 6.0 percent target of real GDP growth continue to be strong.”
Near-term balance of payments challenges persist, the bank said. It said it hoped that improvements in export growth, increases in foreign direct investment and other financial inflows would help contain these pressures.Average consumer price inflation, which stood at 3.5 percent in the July-October period, is “expected to increase in the coming months,” the bank said, citing higher international oil prices and imposition of regulatory duty on non-essential import items.
With foreign reserves dwindling, some analysts say Pakistan may need an International Monetary Fund bailout to avert a balance of payments crisis akin to the one it suffered in 2013, when it also sought IMF help.The bank in July suggested weakening the rupee to ease the pressure on the current account, but the finance ministry slapped down the idea.