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Kibor

In: Business and Management

Submitted By saifu
Words 1786
Pages 8
The Pakistani rupee was put in circulation after the country became independent in 1947.The currency was decimalized in 1961, with the rupee subdivided into 100 paise (singular paisa).ISSUING AUTHORITY: State Bank of PakistanThe Pakistani rupee declined against the USA dollar until the start of the century, whenPakistan's current account surplus pushed the rupee up.The inflation pressures (and outlook), that caused concerns until 2005, at last began toease in 2006, potentially in response to both, tight monetary policy pursued by SBP,which arrested the uptrend in core inflation, and better supply management of essentialfood items by the Government of Pakistan, which helped a fall in broad inflation.In Pakistan KIBOR Rates is often an important statistic. These are Karachi Interbank Offered Rates (KIBOR) KIBOR-Rates KIBOR is the average asking price of the loans to be made by one bank to another, it has nothing to do with the banks lending to corporates. That is why when banks quote KIBOR-based prices for loans to their customers, it is the premium they demand over KIBOR, and not KIBOR itself that really takes into account the credit worthiness of the borrower and the prospects of loan recovery or default. KIBOR is defined as the Average rate, Ask Side, for the relevant tenor, as published on Reuters page KIBOR or as published by the Financial Markets Association of Pakistan in case the Reuters page is unavailable .It is Karachi Inter Bank Offer Rate (KIBOR), given by specialized institution on daily ,weekly, monthly and on 1, 2 and 3 yearly basis to all the commercial banks of Pakistan so that they charge interest to their customers on that basis. This rate is inflation-adjusted rate and then banks by adding 2 or 3% in KIBOR rate charge their customers for their profit.
21
st
January, 2004
SBP, PBA ASK BANKS TO USE KIBOR AS THEBENCHMARK RATE FOR CORPORATE

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