KARACHI, Sept 20 (Reuters) - Pakistan's central bank raisedits benchmark interest rate by 25 basis points to 7.25% onMonday, the first move after six consecutive decisions to keeprates on hold since last year.

"Since its last meeting in July, the MPC (Monetary PolicyCommittee) noted that the pace of the economic recovery hasexceeded expectations," the State Bank of Pakistan said in astatement accompanying the decision, noting the country's COVIDsituation was improving and domestic demand strengthening.

(Reporting by Syed Raza Hassan and Charlotte Greenfield;Editing by Catherine Evans) ((charlotte.greenfield@thomsonreuters.com; +92 300 856 6702;Reuters Messaging:charlotte.greenfield.thomsonreuters.com@reuters.net))