Trade and industry has attached high hopes from the much-awaited monetary policy, which will be announced on May 17, as a cut in the interest rate is expected.
While keeping the interest rate unchanged in March, the State Bank justified its decision by saying that despite all positive signs including low inflation, higher large scale manufacturing growth, rupee appreciation and improved foreign exchange reserves, ‘the economy still faces many challenges’.
The State Bank on Tuesday reported that the government’s borrowing from the central bank during the first 11 months of this fiscal year was minus Rs85 billion which means the government has started retiring central bank’s debt.
Another positive indicator was the monetary expansion which remained much below the last year. During the period, the monetary expansion was 6.1 per cent compared to 9.2pc during the same period of last year.
