The State Bank of Pakistan (SBP) injected Rs. 12.38 trillion into the banking system on Friday through conventional and Shariah-compliant Open Market Operations (OMO) to meet short-term liquidity requirements.
According to details released by the central bank, Rs. 11.91 trillion was provided through conventional reverse repo operations, while another Rs. 471 billion was injected through Shariah-compliant Modarabah-based reverse repo operations.
The largest share of the liquidity injection came through a 17-day conventional reverse repo operation.
The SBP accepted Rs. 11.75 trillion under the 17-day tenor at a cut-off rate of 11.51%. The central bank also accepted Rs. 163.1 billion through a seven-day tenor at a rate of 11.54%.
The partial acceptance of some bids on a pro-rata basis reflected strong demand from banks for short-term liquidity.
Under the Shariah-compliant liquidity operation, the SBP injected Rs. 400 billion through a 17-day Modarabah-based reverse repo at a cut-off rate of 11.52%.
Another Rs. 71 billion was accepted under the seven-day tenor at a rate of 11.56%.
For Islamic banks, the SBP uses Modarabah-based reverse repo and Bai Muajjal mechanisms to manage liquidity. Government of Pakistan Ijara Sukuk serves as eligible collateral for these operations.
Open Market Operations are among the SBP’s key monetary policy tools for managing liquidity and maintaining stability in the financial system.
Through conventional reverse repo operations, the central bank provides funds to banks and primary dealers against government securities, including Market Treasury Bills and Pakistan Investment Bonds.
The latest liquidity injection comes as the SBP continues efforts to maintain stable money market conditions following its decision to keep the policy rate unchanged.
The operation is aimed at ensuring adequate short-term liquidity for financial institutions and supporting the smooth functioning of Pakistan’s financial markets.
