The State Bank of Pakistan is likely to increase interest rate in the range of 25 basis points or 50 basis points while announcing the monetary policy by end this week.

A survey conducted by a private television channel Tuesday revealed that following the sharp depreciation of rupee lately by 4.5 percent, the analysts, financial wizards belonging to mutual funds, banks and leading brokerage houses the interest rate likely to show an increase of 25 to 50 basis points.

The State Bank of Pakistan will announce monetary policy on Friday for two months through press statement, an official said.

About 33 financial experts were asked about the central bank monetary policy stance, which showed that only three of the wizards were of the opinion that the rate to remain unchanged at 6 percent. However, some 27 analysts from the leading brokerage houses, mutual funds and other financial institutions were of the opinion that central bank to increase rate by 25 basis points, while three were of the opinion that it might raise by 50 basis points.

If the State Bank of Pakistan increased the benchmark interest rate it would be done to put a lid on devaluation and upcoming Ramzan where prices show spiral owing to rising demand.

Those who said the rate would remain unchanged viewed that now the risk of devaluation is quite low because in almost four months, domestic currency recorded an adjustment of nearly 10 percent rising from 105.55 to 115.48 to dollar.

Analysts were of the view that following the depreciation, Ramzan in May and rising trend witnessed in imports and crude oil prices, effective monetary policy has been the need of hour.

“Alteration required even International Monetary Fund said that now the government has to consider monetary policy and showed not follow loosening of the policy”, they said.