Pakistan cuts rate to 8.5 percent on falling oil prices

(MENAFN) Pakistan's central bank cut its key discount rate to 8.5 percent from 9.5 percent, in line with analysts' forecasts and citing lower inflationary pressure on falling global oil prices, Arab News reported.

The central bank's governor said the new rate would be in place for two months. Business leaders had earlier called the bank to easy monetary policy to encourage private sector investment and accelerate growth.

The International Monetary Fund (IMF) saved Pakistan from possible default in 2013 by lending it USD6.8 billion over three years. The cash is being doled out in increments and could stop if Pakistan fails to institute changes.

The government of the Prime Minister is under pressure to do more to revive the economy, solve crippling power shortages and create favorable conditions for badly needed foreign investment.