Higher food prices will likely push Pakistan's inflation rate above the country's 6.5 percent target for the 2006/07 fiscal year, State Bank of Pakistan Governor Shamshad Akhtar told journalists on Thursday.
"We are doing pretty well on the core inflation given the monetary tightening we have had, but it is quite possible because of the food prices being somewhat on the uppish that the average inflation rate could be above the inflation target rate," she said before giving a lecture on banking reform at a Geneva university.
In her speech, Akhtar said the increased presence of foreign banks in Pakistan and a recent spate of mergers were due to "high investor confidence and economic prospects".
"The current merger and acquisition (wave) is also being triggered by the need for banks to meet higher capital requirements and also growing competition which will make (it) increasing(ly) difficult for small banks to survive," her speech text read.
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