Regulatory Alerts2025-05-05 | DMMD Circular No. 04SBP Policy Rate and Overnight Repo/Reverse-Repo Facilities
The State Bank of Pakistan has reduced its Policy Rate from 12.00% to 11.00%, effective May 6, 2025. This adjustment establishes an overnight reverse repo ceiling of 12.00% and a repo floor of 10.00%, preserving the existing 200-basis-point interest rate corridor. Commercial banks and primary dealers must maintain money market overnight rates near the new target while all other monetary management directives remain in force.
Circulars/Notifications -
Domestic Market & Monetary Management Department
DMMD Circular No. 04 of 2025
May 05, 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. 01 dated January 27, 2025. Following changes are announced with reference to this circular:
SBP has decided to decrease ‘Policy Rate’ (Target Rate) from 12.00% to 11.00%.
SBP Overnight Reverse Repo (Ceiling) rate will be at 12.00%, i.e., 100 bps above the SBP Policy Rate.
The SBP Overnight Repo (Floor) rate will be at 10.00%, i.e., 100 bps below the SBP Policy Rate.
Accordingly, the Floor and Ceiling levels for the Interest Rate Corridor are 10.00% and 12.00% 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 May 6th, 2025. Other instructions on the subject shall, however, remain unchanged.
Yours Sincerely,
Sd/
(Dr. Mahmood ul Hasan Khan) Director
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