The Presidents/ Chief Executives,

All Commercial Banks/ Primary Dealers

Dear Sirs/ Madam,

SBP Overnight Repo / Reverse-Repo Facilities

Please refer to BPRD Circular No.7 dated 20th April 2009 and DMMD Circular no.1 dated 15th August 2009. Following changes are announced with reference to these circulars:

1. Existing SBP 3-Day Repo facility against Government of Pakistan Market Treasury Bills and Federal/Pakistan Investment Bonds has been renamed as “SBP Overnight Reverse-Repo Facility”. This will serve as the "Ceiling" for the Interest Rate corridor as announced by the referenced circular. Please note that the tenor of this facility is now overnight.
2. The SBP Overnight Reverse-Repo (Ceiling) rate has been reduced from 14.0% to 13.0% p.a.
3. The newly introduced “SBP Overnight Repo facility” will be available at 10.0% p.a. This will serve as the "Floor" for the Interest Rate corridor as announced by the above referenced circular.
4. Hence, the Floor and Ceiling levels for the interest rate corridor are 10% and 13% p.a. respectively (i.e. width of 300 bps).
5. Above changes are effective from 17th August 2009.
6. Other instructions on the subject shall, however, remain unchanged

Please acknowledge receipt.