The State Bank of Pakistan uses monetary policy to control the cost and availability of money and credit in the country to reach the government's inflation target while supporting economic growth. They used to focus on controlling the amount of money in circulation, but now they mainly use the overnight money market repo rate. Factors like budget deficits, money supply, and inflation expectations affect inflation in Pakistan. Inflation in Pakistan is mostly influenced by changes in the money supply compared to real economic growth. Financial reforms in the late 1980s helped stabilize inflation and money growth in the country.