ISLAMABAD  - The State Bank of Pakistan (SBP) is likely to bring the interest rate in single digit in the upcoming monetary policy which is scheduled to be announced in the first week of December, say sources.

Experts believe that there are increased chances that average current fiscal year 2012-13 Consumer Price Index (CPI) will be close to 9 per cent, below the target of 9.5 per cent set by the government.

In recent months inflationary pressure in Pakistan seems losing steam as gauged by Consumer Price Index (CPI) 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.

With increased probability that current fiscal year 2012-13 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.