Pakistan central bank cuts key rate

ISLAMABAD, June 10 (Reuters): Pakistan's central bank cut its key interest rate by 150 basis points on Monday in a widely expected move, marking its first rate reduction in nearly four years in its effort to boost growth amid a sharp decline in retail inflation.

The decision to cut the key rate to 20.5 per cent comes two days ahead of Pakistan's annual budget and a week after data showed inflation slowed to a 30-month low of 11.8 per cent in May.

"The significant decline in inflation since February was broadly in line with expectations, (but) the May outturn was better than anticipated earlier," the State Bank of Pakistan (SBP) said in a statement.