The State Bank of Bank of Pakistan (SBP) has decided to maintain its benchmark interest rate at 5.75 per cent for another couple of months with a "modest rise" expected in inflation, an SBP statement said Friday.

The SBP expects manufacturing activity "to benefit from higher development spending, growing investments in CPEC-related projects, improvement in security condition, and the continued trend of stable and low cost of borrowing."

"Based on current projections of agriculture sector growth, GDP growth is likely to reach the annual target of 6.0 percent for FY18 leading to an improved capacity to accommodate rising domestic demand," the SBP statement read.

With no shocks expected on the supply side and only a modest increase in inflation, the Consumer Price Index (CPI) inflation will stay below the 6pc target for FY18.

The current account deficit widened to $2.6 billion in the past two months "primarily driven by higher imports of productive goods, especially of machinery, metal and petroleum products," offsetting the "impact of healthy growth in exports and workers’ remittances during Jul-Aug FY18".

Foreign direct investments (FDI) saw a net inflow of $456 million, "which is more than double the level of inflows in the corresponding period last year".

The SBP predicts exports will rise but imports will increase faster owing to domestic and CPEC-related activity.