LAHORE - In recent months inflationary pressure in Pakistan seems losing steam as gauged by Consumer Price Index and experts are expecting the trend will continue in short run.They said that CPI for the month of October is likely to dip close to its lowest in the new rebased and reclassified regime. To recall, CPI in line with international standards was rebased and reclassified last year in August 2011 with July 2008 as new base.With increased probability that FY13 average CPI to fall below the government target of 9.5 per cent, it provides central bank some room to continue the process of monetary easing. With real interest likely to remain in the positive territory, experts anticipate that central bank could reduce the policy rate by another 50-100bps in December monetary policy.Price pressure, as endorse by SPI (Sensitive Price Index) in the month of October is depicting subdued trend, particularly in the food head. Furthermore, average oil prices that mainly include diesel and petrol have also declined by approximately 1 per cent from last month. On these premises, experts believe October MoM CPI to clock in the range of 0.1-0.3 per cent as against 0.79 per cent last month and 1.44 per cent registered in the same month last year. Subsequently, we expect CPI for the month of October to stand in the range of 7.1-7.6 per cent, the lowest on the rebased and revised CPI. Last time 7.5 per cent was witness in October 2009 as per the new base and it was seen in May 2007 as per old base.  With continuation of soft CPI numbers, experts believe there are increased chances that average FY CPI will be close to 9 per cent, below the target of 9.5 per cent set by the government. Further, real interest rates are expected to remain in positive territory for the remaining of the year. This could compel the central bank to continue the process of monetary easing and we see another 50-100bps cut by the central bank in December MPS.With inflation likely to fall well within the target, the risk to call comes from strain in the external account. Though, it is expected country’s current account to fare better in FY13 as compared to FY12, but experts expect reduce support from financial account to be a major threat. They project FY13 current account to fall in the range of $1.6-2b (0.7-0.8 per cent of GDP) as against $4.6b (2.0 per cent of GDP) last year. However, diminishing FDI (Foreign direct investment) coupled with higher debt payment (particularly in 2H of IMF) is likely to keep the overall external account under pressure. Resultantly, they expect forex reserve to deplete to around $12b by the year end, with SBP reserve falling close to $8b. Thus, they expect Rupee to depreciate by 7-8 per cent during the year to reach Rs101-102 by June 2013.