Karachi February 27 2023: Pakistan lending benchmark, 6-Month KIBOR, reaches an all-time high of 19.97 percent on 23th February 2023 on anticipation of rate hike.
On February 22 2023, SBP raised PKR 257.7 billion through the auction of market treasury bills at all-time high rates and 295 basis points above the policy rate of 17 percent, according to State Bank of Pakistan.
The cut-off yield for 3 Months, 6 Months, and 12 Months paper settled at 19.95 percent, 19.9000 percent, and 19.7900 percent, respectively. Cut-off yields increased by 195, 206, and 184 basis points for 3 Month, 6 Month, and 12 Month T-Bills, respectively.
“With IMF aid unlikely to arrive before end-March -- assuming current negotiations are successful -- FX reserves will remain strained. We expect the SBP to hike rates by 200 bps to 19 percent at its March meeting. A further drop in import demand due to higher rates will support FX reserves until the aid arrives. Further ahead, the SBP will likely stay on hold through June” says Bloomberg in its research report.
Before this upsurge during the mid of last month and this time, 6-Month KIBOR hit high of 15.76 percent on 11th November 2008.
The other most widely used 3-Month KIBOR is recorded at 19.81percent while 1-year KIBOR registered at 20.32 percent on 24th February 2023, according to central bank data.
Pakistan’s Inflation, increased by 27.6% on year-on-year basis in Jan 2023 as compared to an increase of 24.5% in the previous month and 13.0% in Jan 2022. On month-on-month basis, it increased to 2.9% in Jan 2023 as compared to an increase of 0.5% in the previous month and an increase of 0.4% in Jan 2022, according to data released by Pakistan Bureau of Statistics.
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