The State Bank of Pakistan cut its benchmark policy rate by 50 basis points to 10.5% in December, marking the second rate cut this year and surprising market expectations, which had forecast no change. The move came shortly after the IMF approved a $1.2 billion disbursement, which strengthened Pakistan’s foreign exchange reserves and enabled the government to service its debt. The World Bank projects annual GDP growth at just 3% through June, below the central bank’s previous forecast of 3.25%-4.25%. Annual inflation eased slightly to 6.1% in November, though the central bank has warned that price growth is likely to remain above its 5%-7% target range beyond December.