Pakistan maintains main interest rate at 6.5

(MENAFN- Arab News) KARACHI: Pakistan's central bank maintained its benchmark interest rate at 6.5 percent on Saturday amid an ongoing drop in inflation pressures the governor said.
'Improvements in the macroeconomic indicators let (the State Bank of Pakistan) continue with its accommodative monetary policy stance' said Gov. Ashraf Mahmood Wathra.
'The key factors facilitating this decision can be pinned down to a sharp decline in CPI inflation along with a benign outlook and improvement in the external account.'
The annual inflation rate in Pakistan stood at 3.16 percent in June well down from 8.2 percent the same time last year.
'Narrowing fiscal deficit and continuation of (the International Monetary Fund's) Extended Fund Facility improved the market sentiments.'
'These developments also led to an upgrade in Pakistan's sovereign ratings by international ratings agencies in recent months.'
Last month Moody's Investors Service upgraded the country's foreign currency government bond rating from negative to stable.
Pakistan is also just over half-way through a three-year $6.7 billion IMF program.
The central bank has gradually reduced interest rates this year as it seeks to spur economic growth against a backdrop of slowing inflation largely due to weak oil prices.