KARACHI: Pakistan’s central bank said on Friday it was leaving its key policy rate unchanged at 9.5 per cent.

Last year, the government cut the interest rate by two percentage points in an effort to boost growth.

But economic pressures are building ahead of elections due in several months. The government is unwilling to cut subsidies but has made little progress in increasing revenue from taxes to fund spending.

“There is a shortfall in revenue collection and subsidies are also mounting pressure on our economy,” said State Bank governor Yaseen Anwar. “Inflation is also increasing.”