The rate of 14 per cent will be maintained from April to June, 2011 and if there is a further decline in inflation, then a softer stance on the interest rates could be taken. - File Photo.

KARACHI: The State Bank of Pakistan (SBP) announced the monetary policy for the next two months and according to expectations, decided to maintain the interest rate of 14 per cent, DawnNews reported.

According to a spokesperson, the state debt has decreased along with the inflation which is a good sign.

The Central Bank’s monetary policy director, Hamza Malik while talking to the media said that the economic situation of the country has improved considerably. But he also warned that if reforms are not applied in the country the inflation may increase again.

Malik also said that the country’s financial institutions are improving which has led to stabilization of interest rates.

He further said that the government must control the loans being taken while also managing the electricity and gas crisis. He stated that along with that there could further be a decrease in subsidies so that there is a decline in the country's fiscal deficit.

Malik said that the rate of 14 per cent will be maintained from April to June, 2011 and if there is a further decline in inflation, then a softer stance on the interest rates could be taken.