State Bank of Pakistan cut interest rates for the second time this year, suggesting that lower inflation gave it more room to stimulate a sluggish economy.

The cut, by a full percentage point to 13%, was made on Saturday and will be effective Monday.

Syed Salim Raza, the governor of the central bank, said the cut was made "in recognition of the positive macroeconomic developments and to provide impetus to growth, while remaining aware of the risks and challenges faced by the economy."

The median