The State Bank of Pakistan has reduced the overnight Repo and Reverse-Repo facilities rates by 50 basis points, following cut in key policy rate. According to a circular issued on Saturday, the SBP Overnight Reverse-Repo (Ceiling) rate has been reduced from 14.00 percent to 13.50 percent pa (per annum).
The SBP Overnight Repo facility will be available at 10.50 percent pa. This will serve as the 'Floor' for the Interest Rate corridor as announced by the above referenced circular.
Hence, the Floor and Ceiling levels for the interest rate corridor are 10.50 percent and 13.50 percent p.a. respectively (ie width of 300 bps). These changes are effective from August 1, 2011. Other instructions on the subject remain unchanged.