SBP revises policy, O/N reverse repo rates

The State Bank of Pakistan (SBP) has decided to increase its Policy Rate (target rate) from 6.00 percent to 6.50 percent. According to DMMD Circular No. 12 of 2018, the SBP Overnight Reverse Repo (Ceiling) rate will be at 7.00 percent, ie, 50 bps above the SBP Policy Rate. The SBP Overnight Repo (Floor) rate will be at 5.00 percent, ie, 150 bps below the SBP policy rate.
Accordingly, the floor and ceiling levels for the interest rate corridor are 5.00 percent and 7.00 percent p.a. respectively. (ie, width of 200bps).
The SBP will ensure that money market overnight rate remains close to the SBP Policy Rate (target rate). Above changes are effective from 28th May, 2018. Other instructions on the subject shall, however, remain unchanged, the central bank added.