UPDATE 1-Pakistan leaves key policy rate unchanged at 9.5 percent

Last Updated: Fri, Apr 12, 2013 13:20 hrs

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April 12 (Reuters) - Pakistan's central bank said on Friday is was leaving its key policy rate unchanged at 9.5 percent.

The State Bank of Pakistan said it faced two main challenges in reaching a policy decision: "to manage the balance of payment position and to contain the possible increase in inflation."

"The balance of payments position continues to be driven by low financial inflows and high debt payments," said the central bank.

"A cumulative net capital and financial inflow of $34 million during July - February, FY13 is insufficient to finance the external current account deficit of $700 million for the same period."

The Asian Development Bank, one of Pakistan's biggest lenders, has said the country faces a serious balance of payments situation and may have to turn to the IMF again to avert a crisis.

(Created by Michael Georgy; Editing by Nick Macfie)

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