Pakistan’s central bank left interest rates unchanged for a
third straight meeting to contain a rebound in inflation and support the
rupee.
The State Bank of Pakistan kept the target policy rate at 6
percent, Governor Ashraf Mahmood Wathra said in a statement in Karachi
on Saturday. The move was predicted by 18 of 19 analysts in a Bloomberg
survey, with one seeing a cut to 5.5 percent.
“The rise in inflation was anticipated and the benign
inflation outlook for the remaining months of fiscal year ending June 30
remains largely unchanged,” the State Bank of Pakistan said. The
central bank expects average inflation to remain between 3 percent and 4
percent in the period, according to a statement in January.
Prime Minister Nawaz Sharif’s administration is looking to
boost growth to a nine-year high without stoking inflation that
accelerated to the fastest pace in 14 months this February. The rupee is
among Asia’s worst-performing currencies this year, depriving Pakistan
of the chance to follow neighbor India into more monetary easing.
“Pakistan’s interest rates are currently at rock-bottom
levels and we also do not expect a hike this year amid weak global oil
and other commodities," Fahad Hussain Khan, an analyst at Adam
Securities Pvt. in Karachi, said by phone before the decision. "The
dynamics may change if oil rebounds in 2017.”
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