SBP Announces New Interest Rate Corridor

The State Bank of Pakistan (SBP) has revealed updated rates for its overnight Repo and Reverse Repo Facilities, following a reduction in the Policy Rate (Target Rate) from 12 percent to 11 percent.

Effective May 6th, 2025, the SBP Overnight Reverse Repo (Ceiling) rate will be set at 12 percent, which is 100 basis points above the SBP Policy Rate. Concurrently, the SBP Overnight Repo (Floor) rate will be 10 percent, representing 100 basis points below the SBP Policy Rate.

Consequently, the Floor and Ceiling levels for the Interest Rate Corridor are established at 10 percent and 12 percent per annum, respectively, creating a width of 200 basis points. The SBP aims to maintain the money market overnight rate close to the SBP Policy Rate (Target Rate).