6-Month KIBOR Declines By 63 Basis Points As Market Expects Another SBP Rate Cut

The 6-Month Karachi Inter-Bank Offered Rate (KIBOR), a benchmark for lending to consumers and businesses, fell by 63 basis points (bps) on a day-on-day (DoD) basis after this week’s domestic bond auction which saw cut-off yields declining by up to 148 basis points.

According to the State Bank of Pakistan (SBP) data, the 6-month KIBOR clocked in at 17.94 percent as market sees central bank’s policy rate to fall further in September 2024. A few brokerages have tipped SBP to cut the key lending rate by 150 basis points to 18 percent.

The other widely used 3-Month KIBOR was down 80 bps and was recorded at 18.08 percent. The 1-year KIBOR slid by 33 bps to 17.31 percent.

Official data indicates that Wednesday saw the cut-off yield for the 3-month T-Bills down by 148 bps to 17.49 percent. The cut-off yield for the 6-month T-Bills went down by 101 bps to 17.74 percent while the cut-off yield for the 12-month T-Bills declined by 74 bps to 16.99 percent.

The government raised Rs. 52.01 billion for the three-month paper in the competitive auction. It also raised Rs. 144.05 billion and Rs. 125.12 billion for the 6-month and 12-month T-Bills respectively.

A further breakdown of the official numbers indicates that the government also raised Rs. 75.62 billion through non-competitive bids. This took the total amount raised during the auction to Rs. 396.8 billion.