Kibor at 13-month low

Friday July 10, 2009

KARACHI: The declining trend in benchmark lending rate in Pakistan will be a sigh of relief for the large scale manufacturing sector that posted a decline of 8 percent last year. The declining cost of borrowing may help revive partially the economic activity in the country, analysts said. Six-month Kibor settled at 12.1 percent on July 9, 2009, posting a sharp fall of almost 360 bps in this calendar year till date.

Last time this rate was seen in May 2008. Amid ample liquidity in the money market coupled with CPI inflation in the month of June 2009 at 16-month low 13.1 percent, it is estimated that Kibor may fall below 12 percent, Muhammad Sohail, a leading analyst said. Listed leverage companies would be the main beneficiaries of declining lending rates like Engro, DG Khan Cement, he added.

(BRecorder)