The 6-Month Karachi Inter-Bank Offered Rate (KIBOR), a benchmark for lending to consumers and businesses, surged by 35bps on a day-on-day (DoD) basis on Wednesday (July 13) to touch an all-time high amid rising borrowing costs.
According to the State Bank of Pakistan (SBP) data, the KIBOR clocked in at 15.87 percent. This is an all-time high figure according to data from Arif Habib Limited.
The other widely used 3-Month KIBOR was up 27bps and was recorded at 15.63 percent. The 1-year KIBOR was up by 34bps and stood at 16.23 percent.
The State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) on Thursday raised the policy rate by 125 basis points to 15.0 percent from 13.75 percent, the highest rate in 13 years.
In a press conference after the monetary policy committee (MPC) met, SBP’s Acting Governor Dr Murtaza Syed said the most important objective behind the hike was to control rising inflation.
He added that if the central bank had not raised the policy rate, it could have led to a worse situation leading to hyperinflation and further pressure on the currency.
It is pertinent to mention here that the central bank has cumulatively increased the policy rate by 800bps since September 2021.
