What KIBOR actually is
Banks lend to and borrow from each other every day. That is how they manage their short-term funding. KIBOR is the average offered rate for that interbank lending, published for several tenors. Which tenor a financing agreement uses depends on the product.
Two things follow from that:
- KIBOR is a market outcome, not an announcement. It moves every business day.
- KIBOR stays anchored near the policy rate, inside SBP’s rate corridor, because banks can always deal with the State Bank at rates around the policy rate.
Bid and offer: why there are two numbers
Every tenor is quoted as a pair. The bid is the rate at which banks are willing to take money in. The offer is the rate at which they are willing to lend it out.
The offer is the higher of the two. It is the side most financing agreements reference, though your own agreement is what settles it.
So when someone says “6-month KIBOR is 11.51”, ask which side they mean. On 13 August 2026 the 6-month bid was 11.51 and the offer was 11.76. That is a quarter of a percent apart, which on a large financing amount is real money.
Why "today" is not always today
This deserves its own warning, because it trips up everyone who checks rates online. KIBOR is published on business days. On a Saturday, a Sunday, or a public holiday, no new set is published, and the most recent figures stay in place.
A live example. On Monday 17 August 2026, the newest published KIBOR set was still Thursday 13 August. That is because 14 August is Independence Day, and the 15th and 16th were the weekend. Anyone reading a page that said “today’s KIBOR” on that Monday was reading Thursday’s number.
That is why the rates panel on this page carries the State Bank’s own as-of date, not your device’s date. If the two differ, the State Bank’s date is the one that matters.
Why KIBOR moves
The single biggest driver is the SBP policy rate, and expectations about it. When the Monetary Policy Committee raises, cuts or holds the rate, KIBOR adjusts around the new level. It often starts drifting before a decision, when the market expects one. Day-to-day liquidity in the banking system moves it in smaller steps.
So reading KIBOR is mostly reading monetary policy. Our companion guide explains that side: SBP policy rate explained. (Link: https://www.abl.com/sbp-policy-rate-explained/)
It also means the calendar matters. The MPC meets on pre-published dates, eight times in financial year 2026-27, listed in SBP’s advance calendar. (Link: https://www.sbp.org.pk/our-operations/monetary-policy) If you are close to a repricing date, it is worth knowing whether a decision falls just before it.
Why the tenors differ
You will notice 12-month KIBOR usually sits above 3-month KIBOR. The reason is straightforward. The longer money is committed for, the more uncertainty there is about rates and conditions over that span. That uncertainty gets priced in.
This has a practical consequence:
- An agreement priced off 3-month KIBOR reprices four times a year, so market moves reach you quickly, in both directions.
- One priced off 6-month or 12-month KIBOR reprices less often. That means steadier installments, but a slower benefit when rates fall.
Neither is better in the abstract. If predictable installments matter more to you, a longer tenor helps. If you expect rates to fall, a shorter tenor passes that through sooner. Ask which tenor a facility uses before you sign, not after.
What KIBOR means for your installment
Most variable-rate financing in Pakistan is priced as KIBOR plus a margin. It is repriced at fixed intervals, commonly matching the KIBOR tenor in the agreement. On conventional financing, that total is the markup rate.
The margin is set by the bank and normally stays fixed for the life of the facility. The KIBOR part is what moves. When KIBOR rises, your installment can step up at the next repricing date. When it falls, it can step down.
At Allied Bank, these financing products are priced on 1-year KIBOR plus the bank’s spread:
- Allied Personal Finance
- Allied Car Finance
- Allied Scooty Finance and Allied Electric Bike Finance
- Allied Solar System Finance
- Allied Home Finance
Each product page gives the spread and the terms. (Links: /personal/loans/allied-personal-finance/ · /allied-car-finance/ · /personal/loans/allied-scooty-finance/ · /personal/loans/allied-electric-bike-finance/ · /personal/loans/allied-solar-system-finance/ · /personal/loans/allied-home-finance/)
A purely illustrative example. Say an agreement is priced at 6-month KIBOR plus 3%. At the repricing date, 6-month KIBOR is 11.76%. The applicable rate for the next six months would be 14.76%.
If KIBOR falls half a point by the following repricing, the rate falls by roughly the same amount. The 3% margin here is an illustration, not an Allied Bank offer.
Three things are worth checking in any financing agreement:
- Which KIBOR tenor it uses.
- The margin over KIBOR.
- How often it reprices.
A fourth is worth asking about: whether the agreement has a floor or a cap. Some do, and a floor means a falling KIBOR stops helping you below a certain level.
What KIBOR means for savers
KIBOR is not a deposit rate. But it moves in the same environment that lifts deposit returns. In that environment banks tend to offer stronger profit rates, especially on fixed tenors such as term deposits.
If you are watching KIBOR fall over several months, locking a term deposit sooner rather than later is worth considering. Check current offers on the product pages. (Links: /personal/accounts/term-deposits/ · /personal/savings-and-term-deposits/)
One precise distinction, since savers often assume otherwise. The regulatory minimum profit rate on savings deposits is tied to SBP’s Floor Rate, the bottom of its interest rate corridor, not to KIBOR. Since 1 August 2026 it covers individuals with a monthly average balance of up to PKR 10 million.
KIBOR drives your financing cost. The Floor Rate drives the minimum your savings account must pay. Both sit in the same policy environment, but they are different levers.
KIBOR vs the policy rate, in one line each
The policy rate is decided by the SBP’s Monetary Policy Committee at scheduled meetings. KIBOR is discovered in the interbank market every business day, anchored by that policy rate. The policy rate sets the level; KIBOR does the daily walking around it.
What this means for you
If you have variable-rate financing, today’s KIBOR is a preview of your next repricing. If you are a saver, its direction hints where deposit offers are heading.
Either way, the number only matters together with your own product’s terms. Check those, and check the as-of date before you treat a figure as current.
Next step: talk to Allied Bank about financing terms or current deposit offers at your nearest branch.
General information only. The policy rate, KIBOR and profit rates change over time. The current values are on the State Bank of Pakistan and Allied Bank websites. Product terms and charges are governed by Allied Bank’s prevailing Schedule of Charges.
Frequently Asked Questions
Q. What is today's KIBOR rate?
See the rates panel at the top of this page, refreshed from State Bank of Pakistan data. As of 13 August 2026, 3-month KIBOR was 11.41 / 11.66 (bid / offer).
Q. What does KIBOR stand for?
Karachi Interbank Offered Rate: the rate banks offer each other for short-term lending.
Q. What is the difference between the KIBOR bid and offer rate?
The bid is the rate at which banks will take money in; the offer is the rate at which they will lend it out. The offer is higher, and financing agreements usually reference it.
Q. Why does the KIBOR date on this page not match today's date?
KIBOR is published on business days only. After a weekend or a public holiday, the most recent published set is from the previous business day, and that is the date shown.
Q. Who sets KIBOR?
Nobody sets it by decree. It emerges from interbank market activity each business day, and the State Bank of Pakistan publishes the data. The SBP policy rate anchors where it trades.
Q. Which KIBOR tenor applies to my loan?
Whichever your agreement names. At Allied Bank, personal, car, scooty, electric bike, solar and home finance use 1-year KIBOR plus the bank's spread. Your repricing frequency is also in the agreement.
Q. Is KIBOR the same as the SBP policy rate?
No. The policy rate is the MPC's decision; KIBOR is the market's daily rate that tracks it.
Q. Why did my installment change when the policy rate did not?
Because your financing reprices off KIBOR on its own schedule, and KIBOR moves daily with market conditions and expectations, not only on MPC days.
Q. Does KIBOR set the profit rate on my savings account?
No. The regulatory minimum profit rate on savings deposits is tied to SBP's Floor Rate, not to KIBOR. Since 1 August 2026 it covers individuals with a monthly average balance of up to PKR 10 million.
Q. When is the next monetary policy decision?
SBP publishes the MPC meeting dates in advance on its website. Check its calendar there, since SBP can revise the dates.