Karachi, February 24, 2025 – The State Bank of Pakistan (SBP) has officially released the Karachi Interbank Offered Rates (KIBOR) for various tenors, offering a critical insight into the borrowing costs in Pakistan’s interbank market. These rates, announced on Monday, provide a snapshot of the prevailing lending conditions between financial institutions in the country.
KIBOR is widely regarded as the benchmark interest rate, representing the average interest rates at which banks offer unsecured funds to one another in the interbank market. It plays a pivotal role in determining the cost of credit for businesses, individuals, and financial institutions alike. The rates announced by the SBP for February 24, 2025, are as follows:
- 1-Week Tenor: Bid 11.91%, Offer 12.41%
- 2-Week Tenor: Bid 11.88%, Offer 12.38%
- 1-Month Tenor: Bid 11.79%, Offer 12.29%
- 3-Month Tenor: Bid 11.70%, Offer 11.95%
- 6-Month Tenor: Bid 11.61%, Offer 11.86%
- 9-Month Tenor: Bid 11.54%, Offer 12.04%
- 1-Year Tenor: Bid 11.52%, Offer 12.02%
These KIBOR rates are crucial for financial institutions, businesses, and investors as they serve as a benchmark for pricing loans, deposits, and various other financial products. For example, banks use KIBOR to set interest rates on short-term loans, while investors may use the rate as a reference for the yields on bonds or other fixed-income securities.
The bid and offer rates for each tenor represent the interest rates at which banks are willing to lend and borrow, respectively. For instance, the 1-week bid rate of 11.91% reflects the rate at which banks are willing to lend short-term funds, while the 1-week offer rate of 12.41% is the rate at which they are prepared to borrow. Similarly, these bid and offer rates vary across other tenors, ranging from the 1-month tenor to the 1-year tenor.
The release of these rates by the SBP is a step toward transparency in the financial market, as it provides stakeholders with crucial data to make well-informed decisions. Market analysts, businesses, and financial institutions closely monitor these rates to gauge the broader economic environment and assess the cost of borrowing. A rise or fall in the KIBOR rates could signal changes in the economy’s liquidity, inflation expectations, or monetary policy stance.
The SBP’s timely and regular disclosure of KIBOR rates plays a key role in maintaining a healthy and efficient financial system in Pakistan. These rates not only affect the cost of capital but also offer insights into the overall economic conditions, helping stakeholders plan and manage their financial risks. As these rates fluctuate with market conditions, it is essential for individuals and businesses to stay updated on the latest KIBOR figures to make sound financial decisions.
The SBP’s commitment to transparency ensures that stakeholders have access to accurate and up-to-date information. However, it is important to note that KIBOR rates are subject to change based on the dynamics of the interbank market. Interested parties are advised to verify the latest rates on the SBP’s official website or consult relevant financial authorities before making significant financial decisions.
In conclusion, the KIBOR rates released by the SBP on February 24, 2025, provide an essential reference point for borrowing costs in Pakistan’s interbank market. These rates will be carefully scrutinized by market participants, as they reflect the prevailing economic conditions and influence the pricing of various financial products. As always, the SBP’s transparency in releasing these rates ensures that Pakistan’s financial markets remain open and accessible for all.