By CentralBankNews.info
Pakistan’s central bank cut its policy rate by 50 basis points to 9.50 percent, citing a decline in inflation, improved output from agriculture and the government’s progress in cutting its deficit.
The State Bank of Pakistan (SBP), which last changed its rate 12 months ago when it raised its rate by 50 basis points, said the likelihood for inflation to end the current fiscal year, which began on July 1, on a lower plateau was high due to the fall in international commodity prices, smooth food supplies, low inflation expectations and a significant base effect.
Pakistan’s headline inflation rate eased to 5.82 percent in October from 7.68 percent in September. In 2013 inflation averaged 7.4 percent, down from 11.0 percent in 2012.
In September the SBP said it expected inflation in the 2015 financial year to average 8 percent.\
On Nov. 8 the International Monetary Fund said Pakistan’s economic indicators were improving, with growth expected to reach 4.3 percent in the current fiscal year, inflation was on a downward trajectory and credit to the private sector expanding at a robust pace.
The State Bank of Pakistan issued the following statement:
Based on these considerations, the Board of Directors, State Bank of Pakistan, has decided to reduce the policy rate by 50 basis points to 9.5 percent with effect from 17 November 2014. “
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