Karachi: Karachi Interbank Offered Rate (KIBOR) dropped notably following release of Consumer Price Index (CPI)-based inflation figures. Six-month KIBOR fell by 14 basis points (bps) on day-to-day basis (DoD) to 21.59 percent. Three- and nine-month KIBOR declined by 14 bps each, to 21.63 percent and 21.44 percent, respectively while 1-year rate dropped even more notably to 21.27 percent after decrease of 17bps.

KIBOR is an equilibrium interest rate for given tenor at which banks want to lend money to other banks. Analysts at Arif Habib Limited said decline was witnessed across all tenors after release of inflation numbers for February by Pakistan Bureau of Statistics on Friday, "Which were below market expectation".

Pakistan's headline inflation clocked in at 23.1 percent on year-on-year basis in February, PBS data showed on Friday, much lower than reading in January when it stood at 28.3 percent. Lower KIBOR will help to improve private sector credit off-take, analysts said.