Receding Kibor sparks rate cut hopes

KARACHI: The Karachi Interbank Offered Rate (Kibor) has started to recede, reflecting both the money market’s reaction to low inflation and anticipation of an interest rate cut in the next monetary policy review. From Friday to Monday, Kibor dropped by 11 basis points (bps) for a one-year term, decreasing from 21.38 per cent to 21.27pc. This marked the most significant decline in the two days. However, almost all tenors saw a drop in Kibor. The benchmark six-month Kibor decreased by 10bps to 21.59pc from 21.69pc. One-month Kibor, experienced a slight decline of 4bps, with the rate at 22.21pc on Monday compared to 22.25pc the previous Friday. “The decline is not very significant to determine the real reason behind it. The money market anticipates that the interest rate could see a cut in the next monetary policy,” said S.S. Iqbal, a money market dealer, and a senior banker.