6-Month KIBOR Declines After Monetary Policy Announcement

The 6-Month KIBOR has declined to 10.76 percent in the current session vs. 11.11 percent yesterday, according to Bloomberg’s data. This follows the monetary policy meeting in which the State Bank of Pakistan (SBP) reduced the policy rate by 50 bps to 10.50 percent. The central bank cited contained inflation and improving economic activity. The move marks the first rate cut in the current cycle, as headline inflation averaged within the 5-7% target range during July-November FY26, despite persistent core inflation. The inflation outlook remains broadly stable, supported by relatively benign global commodity prices and anchored expectations. The committee highlighted that economic activity is gaining momentum, with large-scale manufacturing posting stronger-than-expected growth in the first quarter of FY26.