AIRLINK 67.35 Increased By ▲ 2.15 (3.3%)
BOP 5.65 Increased By ▲ 0.08 (1.44%)
CNERGY 4.51 Decreased By ▼ -0.05 (-1.1%)
DFML 25.71 Increased By ▲ 1.19 (4.85%)
DGKC 69.15 Decreased By ▼ -0.81 (-1.16%)
FCCL 19.91 Decreased By ▼ -0.39 (-1.92%)
FFBL 29.15 Increased By ▲ 0.04 (0.14%)
FFL 9.79 Decreased By ▼ -0.04 (-0.41%)
GGL 10.01 No Change ▼ 0.00 (0%)
HBL 113.76 Decreased By ▼ -0.49 (-0.43%)
HUBC 128.43 Decreased By ▼ -0.67 (-0.52%)
HUMNL 6.71 No Change ▼ 0.00 (0%)
KEL 4.44 No Change ▼ 0.00 (0%)
KOSM 4.86 Decreased By ▼ -0.03 (-0.61%)
MLCF 36.70 Decreased By ▼ -0.30 (-0.81%)
OGDC 131.75 Decreased By ▼ -0.55 (-0.42%)
PAEL 22.45 Decreased By ▼ -0.09 (-0.4%)
PIAA 25.69 Decreased By ▼ -0.20 (-0.77%)
PIBTL 6.63 Increased By ▲ 0.03 (0.45%)
PPL 112.70 Decreased By ▼ -0.15 (-0.13%)
PRL 29.16 Decreased By ▼ -0.25 (-0.85%)
PTC 14.85 Decreased By ▼ -0.39 (-2.56%)
SEARL 56.30 Decreased By ▼ -0.73 (-1.28%)
SNGP 65.88 Decreased By ▼ -0.57 (-0.86%)
SSGC 10.93 Decreased By ▼ -0.05 (-0.46%)
TELE 8.68 Decreased By ▼ -0.12 (-1.36%)
TPLP 11.60 Decreased By ▼ -0.10 (-0.85%)
TRG 68.22 Decreased By ▼ -0.40 (-0.58%)
UNITY 23.50 Increased By ▲ 0.10 (0.43%)
WTL 1.34 Decreased By ▼ -0.04 (-2.9%)
BR100 7,295 Increased By 0.5 (0.01%)
BR30 23,795 Decreased By -59.1 (-0.25%)
KSE100 70,229 Decreased By -61.3 (-0.09%)
KSE30 23,087 Decreased By -84.5 (-0.36%)

The Karachi Interbank Offered Rate (KIBOR) dropped notably following the release of Consumer Price Index (CPI)-based inflation figures for the month of February.

Six-month KIBOR fell by 14 basis points (bps) on a day-to-day basis (DoD) to 21.59%. Three- and nine-month KIBOR declined by 14 bps each, to 21.63% and 21.44%, respectively, while 1-year rate dropped even more notably to 21.27% after a decrease of 17bps.

KIBOR is an equilibrium interest rate for a given tenor at which banks want to lend money to other banks.

Analysts at Arif Habib Limited (AHL) said the decline was witnessed across all tenors after the release of inflation numbers for February by the Pakistan Bureau of Statistics (PBS) on Friday, “which were below market expectation”.

Pakistan’s headline inflation clocked in at 23.1% on a year-on-year basis in February, PBS data showed on Friday, much lower than the reading in January when it stood at 28.3%.

The inflation reading was lower than the government’s expectation of 24.5-25.5% and adds to the wider impression that the State Bank of Pakistan (SBP) would start monetary easing in the upcoming meetings. The next Monetary Policy Committee of the SBP is scheduled to take place on March 18.

“Too early to say but yes with inflation coming down, we can expect a monetary easing cycle to start from March 2024,” Tahir Abbas, Head of Research at AHL, told Business Recorder.

In its last meeting, the MPC of the central bank had maintained status quo and kept the key policy rate at 22%.

Lower KIBOR will help to improve the private sector credit off-take, analysts said.

Comments

200 characters
Shahzad Mar 05, 2024 02:02am
Which items hv decreased.all major items like gas, petrol and electricity has been increased in Jan and feb. however few seasonal items like eggs and potatoes they think inflation is down?
thumb_up Recommended (0) reply Reply
kaha81 Apr 07, 2024 04:00pm
@Shahzad , uhhh that's not how CPI is calculated. u should read more.
thumb_up Recommended (0) reply Reply