KARACHI, Aug 12: The Governor, State Bank Dr Ishrat Husain on Thursday said inflation rate will come down in the country with correction in oil and wheat prices and the central bank will not revise its prediction of 5pc inflation during the year 2004-05.

"When there is oil price at $41 per barrel in international market, how can we escape the inflation. Year-to-year inflation rate is something different from the analyzed rate of inflation," he responded to media questions after a corporate awards ceremony, sponsored jointly by Institute of Chartered Accountants, Pakistan and Institute of Cost and Management Accountants of Pakistan here.

The SBP Governor said the wheat shortage would soon be overcome through imports and this would help cut the inflation in the country. To another question, he said he expected further reduction in deficit of the country which during 2003-04 was $3 billion against last year's $3.2 billion.

He rejected the apprehension that the rupee would further lose its value against the dollar. "In the past also, such apprehensions were raised but the situation before you that our currency has improved a lot," he remarked. -APP