KARACHI: The State Bank of Pakistan (SBP) on Friday issued the Karachi Interbank Offered Rates (KIBOR) as of July 22, 2022. These rates are a critical indicator of the cost of borrowing in the interbank market and are utilized as a benchmark for various lending and investment products.
The KIBOR rates play a vital role in the financial sector by providing a reference for banks to determine the interest rates on loans and advances extended to their customers. The rates are also essential for businesses and investors as they influence the cost of capital and overall economic activity.
Here are the latest KIBOR rates as released by the SBP:
| Tenor | BID | OFFER |
|---|---|---|
| 1 – Week | 14.51 | 15.01 |
| 2 – Week | 14.57 | 15.07 |
| 1 – Month | 14.66 | 15.16 |
| 3 – Month | 14.99 | 15.24 |
| 6 – Month | 15.42 | 15.67 |
| 9 – Month | 15.48 | 15.98 |
| 1 – Year | 15.53 | 16.03 |
The KIBOR rates reflect the prevailing market conditions and monetary policy stance of the SBP. Over the past few months, Pakistan has seen significant changes in its economic landscape, influenced by both domestic and international factors. These fluctuations are mirrored in the KIBOR rates, which have shown a steady increase, indicating rising borrowing costs.
The one-week and two-week tenors have bid rates of 14.51% and 14.57% respectively, with offer rates slightly higher at 15.01% and 15.07%. The one-month tenor shows a bid rate of 14.66% and an offer rate of 15.16%. For the three-month period, the bid rate stands at 14.99% with an offer rate of 15.24%.
Longer tenors such as six-month and nine-month have bid rates of 15.42% and 15.48%, with offer rates of 15.67% and 15.98% respectively. The one-year tenor reflects a bid rate of 15.53% and an offer rate of 16.03%, showcasing the highest rates among the tenors listed.
The rising KIBOR rates indicate the tightening monetary policy by the SBP aimed at curbing inflationary pressures in the economy. Higher interest rates tend to slow down borrowing and spending, helping to control inflation. However, they also increase the cost of capital for businesses, which can impact investment and expansion plans.
These rates are crucial for businesses, investors, and financial institutions to make informed decisions regarding borrowing and investments. The SBP regularly updates these rates to reflect current market conditions and monetary policy directions.