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SBP maintains interest rate at 5.75% for next two months

KARACHI: The State Back of Pakistan (SBP) held the interest rate remain unchanged at 5.75% for the next two months keeping in view the inflationary numbers below the expectation.

In a policy statement SBP said that the inflation expectations in the current fiscal year continue to remain well anchored.

The central bank has maintained the rate since May 2016, which is over four-decade low rate.

Majority of analysts argued that the rate stood at its bottom and foresaw gradual upward revision going forward.

It was standing in double digits (at 10%) in first half of fiscal year 2012-13.

SBP added that the real economic activity continues to gather pace at the back of better agricultural output, increase in key Large-scale Manufacturing sectors, and a healthy uptick in the credit to private sector.

This expansion is helped by a range of factors including low cost of inputs, upbeat economic sentiments, improved energy supplies, and China-Pakistan Economic Corridor (CPEC) related investments.

“As a result, GDP growth is expected to further improve in FY17,” it said.