What is KIBOR
KIBOR stands for Karachi Interbank Offered Rate. It is the interest rate at which banks in Pakistan say they are willing to lend rupees to each other for a fixed period. It works as a benchmark: a reference rate that other interest rates are built on.
KIBOR comes with a partner rate, KIBID (Karachi Interbank Bid Rate). KIBID is the rate banks say they will pay to borrow. The difference between the two is the interbank bid–offer spread. When people talk about the "KIBOR rate", they usually mean the offer side.
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How KIBOR is set
KIBOR is not a single bank's rate. A panel of banks submits quotes each business day. The extreme quotes are removed, and the rest are averaged to produce the published rate. Because the rate comes from a panel, a single bank cannot set it.
The State Bank of Pakistan (SBP) oversees the benchmark and publishes the daily figures on its website. Check the SBP site directly for the current methodology and the list of panel banks. We do not reproduce those details here.
KIBOR tenors
A tenor is the length of the loan period the rate applies to. KIBOR is published for several tenors. Short tenors are measured in weeks and longer ones in months, up to about a year.
Longer tenors usually carry a different rate from shorter ones. The gap shows what banks expect interest rates to do. If longer-tenor KIBOR sits above shorter-tenor KIBOR, the market is pricing in higher rates ahead. If it sits below, the market expects rates to fall.
KIBOR and the SBP policy rate
The policy rate is the rate set by the SBP's Monetary Policy Committee (MPC). It is the main tool the SBP uses to control inflation. KIBOR follows the policy rate closely because banks price interbank lending around what the central bank charges and pays.
The latest decision on record is this one: SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC). After a policy rate change, KIBOR usually moves in the same direction within days. Expectations of the next decision can move longer tenors before the MPC meets.
For more on how the MPC decides, see SBP policy rate and Inflation (CPI and SPI).
How KIBOR is used in loan pricing
Most floating-rate loans in Pakistan are priced as KIBOR plus a spread. The spread is a fixed margin added by the bank. It depends on the borrower's credit profile, the collateral and the type of loan.
| Loan type | How KIBOR is typically used |
|---|---|
| Car financing | Variable rate linked to a KIBOR tenor, repriced at intervals |
| Home financing | Floating rate on KIBOR plus spread, reset periodically |
| Running finance and corporate loans | KIBOR plus spread agreed with the bank |
| Islamic financing | Often uses KIBOR as a pricing reference, even though the contract is not interest-based |
The loan agreement states which tenor is used, how often the rate resets and what the spread is. Between resets the rate stays fixed. At each reset it moves to the new KIBOR plus the same spread. So if KIBOR rises, the instalment on a floating loan rises at the next reset.
The bank's quoted rate is only part of the cost. Before signing, read the agreement for processing charges, insurance and early repayment terms. See Saving, Investing, Loans for the wider picture, and Islamic finance on how Islamic banks reference benchmarks.
Where to check KIBOR today
The official source is the State Bank of Pakistan website, which publishes the daily KIBOR and KIBID figures for each tenor. Other websites copy these numbers, sometimes late or with errors. When the exact figure matters, check the SBP site and note the date of the publication you read.
Your bank's offer letter will name the date and tenor of KIBOR it used. You can compare that figure against the SBP record for the same day.
KIBOR, savings and markets
KIBOR affects more than loans:
- Deposits and savings. Bank deposit rates and returns on government savings products tend to move in the same direction as benchmark rates. See National Savings schemes.
- The rupee. Interest rate differences between Pakistan and other countries are one of the factors behind currency flows. See What moves the rupee.
- Events. MPC dates are listed in our Economic calendar (PKT).
Some readers follow rate decisions because they trade currency pairs. Leveraged forex and CFD trading can lose money fast, and a rate surprise can move prices sharply. It is also subject to Pakistani rules, explained in Law and regulators.
Frequently asked questions
What is the meaning of KIBOR?
KIBOR means Karachi Interbank Offered Rate. It is the benchmark rate at which banks offer to lend rupees to each other for a set tenor.
Is KIBOR the same as the SBP policy rate?
No. The MPC sets the policy rate. KIBOR is a market rate built from bank quotes, and it usually stays close to the policy rate.
Where can I find KIBOR today?
Check the daily KIBOR publication on the State Bank of Pakistan website. Copies elsewhere may be delayed.
Why did my loan instalment change?
A floating loan resets to the current KIBOR plus your fixed spread at the intervals in your agreement. If KIBOR moved, your instalment changes at the next reset.
What is the difference between KIBOR and KIBID?
KIBOR is the offered (lending) rate and KIBID is the bid (borrowing) rate. KIBID is normally the lower of the two.
Where can I read more about rates in Pakistan?
See SBP rates and economy and the Trading glossary.