KARACHI: As the State Bank of Pakistan ((SBP) has decided to increase policy rate (Target Rate) from 16.00 percent to 17.00 percent, the SBP Overnight Reverse Repo (Ceiling) rate will be 18.00 percent, ie, 100 bps above the SBP policy rate and will be effective from Jan 24, 2023.

The SBP Overnight Repo (Floor) rate will be at 16.00 percent, ie, 100 bps below the SBP policy rate. Accordingly, the Floor and Ceiling levels for the Interest Rate Corridor are 16.00 percent and 18.00 percent p.a. respectively, ie, width of 200bps.

SBP may hike rates by another 100bps to tame inflation

The SBP will continue to ensure that the money market overnight rate remains close to the SBP policy rate (Target Rate), the central bank said.

Copyright Business Recorder, 2023