KARACHI – The money market opened the week on softer note after State Bank of Pakistan chose to keep its policy rate unchanged. Investors quickly adjusted their positions, and the impact was visible across the yield curve.
KIBOR rates saw slight dip, with longer tenors leading the decline as expectations of easing inflation and improving macro sentiment gradually filtered into interbank pricing.
Pakistan’s money market shows clear easing trend on June 15, as interest rate expectations softened across most maturities following the State Bank of Pakistan’s decision to keep its policy rate unchanged.
Karachi Interbank Offered Rate (KIBOR) moved broadly lower along the yield curve, with only the shortest tenors remaining unchanged while medium- to long-term rates came under noticeable downward pressure. The one-week KIBOR held firm at 11.93%, while the two-week tenor also stayed unchanged at 11.97%, signaling stability at the very short end of the curve.
The rates began to ease sharply as the one-month tenor slipped to 12.08%, down 9 basis points, while the three-month rate dropped more significantly to 12.21%, a decline of 21 basis points. The six-month tenor followed suit, easing to 12.36% (down 20 bps).
Longer-dated maturities recorded the steepest adjustments. The nine-month KIBOR fell to 12.74%, down 25 basis points, while the one-year tenor declined to 12.83%, a drop of 23 basis points.
The broad-based softening as signal that investors are increasingly pricing in easing inflation pressures ahead. Expectations of lower global oil prices, combined with improved regional sentiment after reports of a Pakistan-mediated US–Iran ceasefire, are seen as key drivers potentially reducing imported inflation and easing domestic fuel and energy costs.
Despite the recent pullback, KIBOR rates remain elevated compared to last year. The one-year tenor, in particular, is still 152 basis points higher than end-June 2025 levels, with other maturities also trading above their year-ago positions.
State Bank of Pakistan keeps Interest Rate unchanged amid cautious Monetary Stance
