AAJ TV : Pakistan Ki Awaz

KARACHI : Pakistan will announce monetary policy for the last quarter of the 2008/09 (July-June) fiscal year on April 20, Syed Wasimuddin, chief spokesman for the State Bank of Pakistan, said on Tuesday.

Analysts are expecting a cut in interest rates as inflation has eased from a record high of 25.3 percent in August last year to 19.07 percent in March.

Pakistan's key discount rate was kept unchanged at 15 percent when monetary policy was announced in January after it was raised by 500 basis points in 2008.

Monetary policy would address slower growth while keeping in mind the objective of lower inflation, the country's top economic official and the State Bank governor said in a letter posted on the International Monetary Fund's website last week.

"The SBP (State Bank of Pakistan) will calibrate monetary policy to balance concerns about the slowdown in economic activity, subject to the overall objective of lowering inflation," they said.

"Provided that the expected decline in inflation materialises and market confidence remains positive, there could be scope for a more accommodative monetary policy stance."

In November, Pakistan secured an IMF loan package of $7.6 billion to avert a balance of payments crisis. It got a first tranche of $3.1 billion that month and a second tranche of $848 million in April.

The State Bank said this month there was scope for a cut in its discount rate if there was a fall in inflation and foreign exchange reserves continued to rise.

The IMF also said this month Pakistan's monetary stance was appropriate, but there might be scope for interest rate reductions if inflation declined further.

Copyright Reuters, 2009