Circulars/Notifications - Domestic Market & Monetary Management Department  
 DMMD Circular No. 03 of 2020

March 17, 2020

The Presidents/ Chief Executives,
All Commercial Banks/ Primary Dealers

Dear Sirs/ Madams,

SBP’s Policy Rate and Overnight Repo / Reverse-Repo Facilities

Please refer to DMMD Circular No. 19 dated July 16, 2019. Following changes are announced with reference to this circular:

  1. SBP has decided to decrease its ‘Policy Rate’ (Target Rate) from 13.25% to 12.50%.
  2. It has also been decided to make the interest rate corridor symmetric around the policy rate. Accordingly, SBP Overnight Reverse Repo (Ceiling) rate will be at 13.50% i.e. 100 bps above the SBP Policy Rate.

  3. The SBP Overnight Repo (Floor) rate will be at 11.50% i.e. 100 bps below the SBP Policy Rate.

  4. Accordingly, the Floor and Ceiling levels for the Interest Rate Corridor are 11.50% and 13.50% p.a. respectively (i.e. width of 200bps).

SBP will continue to ensure that the money market overnight rate remains close to the SBP Policy Rate (Target Rate).

Above changes are effective from Mar 18, 2020. Other instructions on the subject shall, however, remain unchanged.


Yours Sincerely,

Muhammad Amin Khan Lodhi

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