| GEO Business|
| Interest rate could be lowered if inflation drops: IMF|
| Updated at: 2020 PST, Wednesday, February 25, 2009|
WASHINGTON: Pakistan's monetary policy is appropriate but there would be room to lower interest rates if inflation declined, the International Monetary Fund said on Wednesday.
In a statement following a 12-day staff mission to review a $7.6 billion stand-by lending program, the IMF said it was "impressed" by Pakistan's resolve to sustain prudent policies, strengthen the social safety net and pursue reform.
But it also said the global economic turmoil was taking a toll on Pakistan's economy, hurting demand for exports and curbing remittances from workers abroad, so economic policies needed to be recalibrated.
The IMF said Pakistan's current monetary policy stance was "appropriate and will continue to promote domestic and external stability."
"Looking ahead if both headline and core inflation decline, there should be scope for lower rates," the IMF said.