The price of the US dollar gained six paisas against the Pakistani Rupee in the interbank trading on Wednesday. The new price of the greenback is Rs277.90 in the interbank trading. On Tuesday, the local unit gained 10 paisas against the US dollar and closed at Rs277.84. Pakistan's headline inflation decelerated on Monday to 20.7% on a year-on-year basis in March, marking a notable decrease from the previous month's reading of 23.1%. This encouraging trend, reported by the Pakistan Bureau of Statistics (PBS), suggests a potential shift in the country's economic landscape. This latest inflation figure, the lowest since May 2022, has stirred discussions regarding the trajectory of Pakistan's monetary policy. It is noteworthy that for the first time in over three years, the Consumer Price Index (CPI)-based inflation has fallen below the critical policy rate, currently set at 22%.

The Ministry of Finance's projection of CPI-based inflation hovering around 22.5-23.5% in March 2024 has been outstripped by the actual figure, lending credence to expectations of an impending reduction in the key interest rate. Despite the recent hike in petrol prices, with an increase of Rs9.66 per liter, the overall inflationary pressures have shown signs of moderation. The government's measures, including a revised relief package for Ramadan, have contributed to alleviating the impact of heightened demand during the religious festival. Furthermore, global dynamics have played a role in shaping inflation trends, influencing the overall economic outlook.

Credit: Independent News Pakistan