Regulatory Alerts2025-01-27 | DMMD Circular No. 01SBP Policy Rate and Overnight Repo and Reverse-Repo Facilities
The State Bank of Pakistan has reduced its policy rate from 13.00% to 12.00%, effective January 28, 2025. This adjustment sets the overnight reverse repo ceiling at 13.00% and the overnight repo floor at 11.00%, preserving a 200-basis-point interest rate corridor. Commercial banks and primary dealers must ensure money market overnight rates track the new target while all other monetary management directives remain in force.
Circulars/Notifications -
Domestic Market & Monetary Management Department
DMMD Circular No. 01 of 2025
January 27, 2025
The Presidents/ Chief Executives, All Commercial Banks/ Primary Dealers
Dear Sirs/Madams,
SBP’s Policy Rate and Overnight Repo / Reverse-Repo Facilities
Please refer to DMMD Circular No. 08 dated December 16, 2024. Following changes are announced with reference to this circular:
SBP has decided to decrease ‘Policy Rate’ (Target Rate) from 13.00% to 12.00%.
SBP Overnight Reverse Repo (Ceiling) rate will be at 13.00%, i.e., 100 bps above the SBP Policy Rate.
The SBP Overnight Repo (Floor) rate will be at 11.00%, i.e., 100 bps below the SBP Policy Rate.
Accordingly, the Floor and Ceiling levels for the Interest Rate Corridor are 11.00% and 13.00% p.a., respectively (i.e., width of 200bps).
SBP will continue to ensure that the money market overnight rate remains close to the SBP Policy Rate (Target Rate).
Above changes are effective from January 28, 2025. Other instructions on the subject shall, however, remain unchanged.
Yours Sincerely,
Sd/
(Dr. Mahmood ul Hasan Khan) Director
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