The lending rate aggressively increased by 145 basis points to a 32-month high at 13.3% on three-year tenure PIB. The commercial banks have incorporated the expected increase in inflation reading in the country into their lending rates. “The commercial banks foresee inflation reading reducing in the long-run,” he added. The breakup further suggests that the government raised another Rs26.9 billion through selling three-year PIB against the set target of Rs30 billion. The government was required to raise higher financing from commercial banks to bridge widening shortfall in budgeted expenditure.

Source: The Express Tribune April 29, 2022 17:22 UTC