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15.12.202512:07:48UTC+00Pakistan Central Bank Surprises with 50bps Rate Cut

In December, the State Bank of Pakistan unexpectedly reduced its benchmark policy rate by 50 basis points to 10.5%, marking the second rate cut of the year, contrary to market predictions of no change. This decision followed the IMF's approval of a $1.2 billion disbursement, strengthening Pakistan's foreign exchange reserves and aiding the government in managing its debt obligations. The World Bank anticipates annual GDP growth to reach merely 3% by June, falling short of the central bank's earlier estimate of 3.25% to 4.25%. In November, annual inflation slightly decreased to 6.1%, yet the central bank cautions that inflation rates may remain above its 5% to 7% target range after December.

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