The State Bank of Pakistan (SBP) has released the latest Karachi Interbank Offered Rates (KIBOR) for all major tenors, effective as of January 13, 2023. The updated KIBOR rates serve as a benchmark for lending in the interbank market and are closely watched by banks, borrowers, and financial institutions for making short- to long-term financial decisions.
According to the SBP’s official notification, the KIBOR for the 1-week tenor has been quoted with a bid rate of 15.39 percent and an offer rate of 15.89 percent. For the 2-week tenor, the bid and offer stood at 15.48 percent and 15.98 percent, respectively. Meanwhile, the 1-month KIBOR was set at 15.74 percent (bid) and 16.24 percent (offer), indicating a rising short-term trend in interbank borrowing costs.
The mid-term tenors reflected slightly higher rates, with the 3-month KIBOR posted at 16.85 percent (bid) and 17.10 percent (offer). Similarly, the 6-month KIBOR was reported at 16.89 percent for bid and 17.14 percent for offer. For the 9-month tenor, the bid remained unchanged at 16.88 percent while the offer rose slightly to 17.38 percent.
The 1-year KIBOR was listed at 16.89 percent on the bid side and 17.39 percent on the offer side, highlighting the steady upward pressure across the interest rate curve. Analysts note that the KIBOR trend reflects the tight monetary policy stance currently adopted by SBP to combat persistent inflation and stabilize the rupee.
KIBOR plays a critical role in Pakistan’s banking sector, as it directly influences lending and deposit rates offered to corporate and retail customers. Banks typically use KIBOR as a reference rate when pricing commercial loans, making it a key indicator of liquidity conditions and market sentiment.
With financial institutions closely tracking daily fluctuations in KIBOR, the rate has become an essential tool for credit risk management and loan pricing strategies. As the economy continues to navigate inflationary pressures and external account challenges, KIBOR will remain under close observation for any signals of easing or tightening in the monetary environment.