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State Bank raises discount rate by 100 bps

SBP raised the key discount rate by 100 bps this afternoon. The market is expected to take the smaller rate hike positively with yields on treasury bills and PIB heading lower. 6 month KIBOR this morning had declined to lower level after yesterday’s meeting with Bank Presidents. Interbank rates are expected to slide lower in tomorrow’s trading since the market had already factored in a higher rate hike and tighter liquidity requirements.