Commercial banks have raised interest rates on loans to the government

Commercial banks have raised interest rates on loans to the government

Karachi (Web Desk) Commercial banks have increased the interest rate on loans to the government by 100 basis points to about 16 percent.

According to Express News, Kibor rose 35 basis points on a daily basis to a high of 15.87%. The reason for the increase in interest rates by banks is the expected rise in inflation. Banking financing rates are usually higher than inflation readings.

Yesterday, the government borrowed Rs 506 crore from commercial banks through the sale of treasury bills, while the target was set at Rs 500 billion. This was the first time since the increase that the T-Bills have been auctioned off. Commercial banks have raised interest rates on loans to the government in view of the increase in policy rates.

Fahad Rauf, head of research at Ismail Iqbal Securities, said the reason for the increase in interest rates on loans by commercial banks was the uncertainty about the central bank’s future policy rate.

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