Pakistan's central bank cut its key policy rate by 100 basis points to 12% on Monday, the governor told reporters, for a sixth straight reduction since June as the country attempts to revive business and economic sentiment amid easing inflation.

The State Bank of Pakistan has slashed rates by 1,000 bps from an all-time high of 22% in June 2024, in one of the most aggressive moves among central banks in emerging markets and topping the 625 bps in rate cuts it did in 2020 during the COVID-19 pandemic.

The bank's governor Jameel Ahmad said at a press conference that the inflation rate would ease further in January but noted that core inflation remained elevated. He said the forecast for full-year inflation in the year to June was an average of 5.5%-7.5%.

Fourteen of 15 analysts surveyed by Reuters expected the central bank to cut its key rate by at least 100 bps mainly due to a drop in inflation.

Pakistan's consumer inflation rate slowed to an over 6-1/2-year low of 4.1% in December, largely due to a high year-ago base. That was below the government's forecast and significantly lower than a multi-decade high of around 40% in May 2023.

Pakistan's economy grew by 0.92% in the first quarter of the fiscal year 2024-25 which ends in June, according to data approved by the National Accounts Committee, and released by its Statistics Bureau in December.

The governor said that the bank maintained its forecast full-year GDP growth at 2.5%-3.5%.

(Reporting by Ariba Shahid in Karachi and Islamabad newsroom; Editing by YP Rajesh and Toby Chopra)