Pakistan’s annual consumer price inflation rate slowed to 9.6% in August, the first single-digit reading in almost three years, the statistics agency said on Monday.

Pakistan struck a deal last month with the International Monetary Fund for a $7 billion loan programme that includes tough measures such as higher taxes on farm incomes and electricity prices.

The prospect of such moves has worried poor and middle class Pakistanis. But inflation has started moving on a downward trend, albeit from a high base.

Monday’s inflation figure was in line with finance ministry projections released on Friday of a range of 9.5 to 10.5% in August. It forecast further falls in September.

Pakistan’s August annual CPI figures were down from 27.4% this time last year and 11.1% in July. The monthly inflation rate was 0.4%, the Pakistan Bureau of Statistics said in a statement.

“Inflation is falling because the currency has remained stable over the past 12 months,” Adnan Sami Sheikh, assistant vice president of research at Pak-Kuwait Investment Company, said.

He added that the rupee had risen 9%-10% against the dollar over last year, bolstered by Pakistan’s moves to restrict demand for the greenback through import controls, high interest rates and other measures.

The State Bank of Pakistan has cut rates for two straight meetings from a historic high of 22% to 19.5%. It will meet again to review monetary policy on Sept 12.

The latest interest rate cut would “keep inflationary expectations well-anchored and will support the sustainable economic recovery in FY2025,” the ministry’s monthly report said.

In an interview with Reuters this week, central bank chief Jameel Ahmed said recent interest rate cuts in Pakistan have had the desired effect, with inflation continuing to slow and the current account remaining under control, despite the cuts.

“Even though interest rates are expected to come down over the medium term, it is unlikely that demand would return to earlier levels,” Sheikh said, citing rises in electricity and fuel prices.

“This puts the government back in the Catch 22 situation, whereby stimulating growth also stimulates balance of payment crisis,” he added.