KIBOR explained

The Karachi Interbank Offered Rate (KIBOR) is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds to other banks in the Karachi wholesale (or "interbank") money market.^[1] The banks used it as a benchmark in their lending to corporate sector.^[2]

It is also known as the benchmark rate and is published by Financial Market Association of Pakistan.^[2]

History

Karachi Interbank Offered Rate (KIBOR) was first introduced in September 2001.^{[3] [4]}

In February 2004, KIBOR became the benchmark rate for corporate lending in Pakistan.^{[3] [4]}

Process

It is quoted daily by participating banks on Reuters at 11:30 am.^[5] With 20 member banks, KIBOR rates are calculated by averaging the middle twelve rates, excluding the four highest and four lowest quotes.^[5]

Tenors

• 1 week^[6]
• 2 weeks^[6]
• 1 month^[6]
• 3 months^[6]
• 6 months^[6]
• 9 months^[6]
• 1 year^[6]

See also

• LIBOR
• Euribor
• Leverage (finance)
• Margin (finance)

Notes and References

1. Web site: SBP exempts Islamic banks from using KIBOR. November 1, 2016.
2. Web site: State Bank of . www.sbp.org.pk.
3. Web site: Banks to use KIBOR as benchmark from Feb 1: Corporate lending. January 22, 2004. DAWN.COM.
4. Web site: Corporate lending: KIBOR made benchmark. February 2, 2004. DAWN.COM.
5. Web site: State Bank of Pakistan .
6. Web site: 6-month KIBOR has hit a 13-year high at 14.1%. Here is what this means. Bilal. Memon. April 26, 2022. Brecorder.