Karachi November 28 2022: KIBOR 6-Month, the benchmark used for lending in Pakistan, reached an all-time high of 16.56 percent in today’s trading as Central Bank on Friday increased rates to a high of 23 years.
The previous high of 15.87 percent was hit on 23rd September 2022, according to data available at SBP. KIBOR is up 91 basis points compared to rate of 15.65% on Friday and 653 basis points up when compared with a rate of year ago.
According to analyst one percent increase in policy rate will add approximately PKR 108 billion to private sector borrowing cost.
On Friday, the Monetary Policy Committee (MPC) decided to raise the policy rate by 100 basis points to 16 percent. The decision reflects the MPC’s view that inflationary pressures have proven to be stronger and more persistent than expected. It is aimed at ensuring that elevated inflation does not become entrenched and that risks to financial stability are contained, thus paving the way for higher growth on a more sustainable basis.
State Bank of Pakistan is of the view that higher food prices and core inflation are now expected to push average FY23 inflation up to 21-23 percent.
