But as the lending rates are surging upwards, deposit rates are also going to depict an upward movement. Trade liberalization has been undertaken in Pakistan for the last 15 years and the maximum tariff rate which was as high as 250-300 percent has been brought down to 25 percent while the average tariff rate is about 9 percent.
This maturity extension program – referred to by some as Operation Twist – should exert downward pressure on longer-term interest rates and help make broader financial conditions more accommodative, thereby supporting a stronger economic recovery.