KARACHI: The State Bank of Pakistan on Saturday announced to keep its key policy rate at six percent for the second meeting in a row.
In a statement, the central bank cited improved demand, an increase in credit to the private sector and better supply-side conditions for its decision.
“With improved business sentiment, lower input prices and better energy availability, supply conditions have improved as well,” said the statement.
The State Bank said that it expected improvements in large-scale manufacturing and industrial growth, building on slight increases seen in the last year.
Large scale-manufacturing grew by 4.1 percent from July to January, up from 2.5 percent in the same period a year before.
The statement said a slight uptick in inflation was indicative of an increase in aggregate demand in the economy.
“This is reflected in rising demand for consumer durables, acceleration in construction activities, and expansion in the services sector,” the statement said.
It cited low private capital inflows and declining exports as of particular concern going forward.
At its last policy review on January 30, the State Bank maintained the interest rate at 6 percent, citing lower inflationary pressures and improved economic indicators.