Monetary policy: SBP reduces interest rate to 5.75%

LAHORE (Staff Report) - The State Bank of Pakistan on Saturday announced the new monetary policy reducing the interest rate further by 25 basis points.

The central bank reduced interest rate by 0.25 percent and brought it down to 5.75 percent.

According to press release issued by State Bank of Pakistan, "In the current fiscal year as well, favourable trends in these factors are expected to yield an overall surplus in the balance of payments with SBP’s foreign exchange reserves estimated to increase to over 4 months of import coverage; up from around 3 months at end-FY15.

Going forward, foreign direct investment is projected to increase as the work on projects under China Pakistan Economic Corridor gains momentum. On the other hand, owing to some anticipated uptick in commodity prices along with improvements in domestic energy supplies exports receipts are likely to recover marginally."