KARACHI, Jan 15: The State Bank of Pakistan will announce its monetary policy on Jan 18. The SBP will issue its first quarterly report of July-September 2006-07 on Jan 17, said a spokesman for the SBP, Syed Wasimuddin, on Monday.

Economists and analysts believe that the SBP would continue with its tight monetary policy and see no chance for any major change. However, they said the policy needs some change as a tight monetary policy was not working as per expectations of the SBP.

The real hurdle is rising inflation despite lesser growth of credit outflows in the market. The SBP should come out with more steps to check the serious issue of rising inflation, they said.

In July 2006, the SBP reviewed the policy and increased the discount rate by 0.5 per cent to 9.5 per cent per annum. It played a key role in the increase of interest rates, but could not check outflows of liquidity into the market, causing inflationary pressure.