SBP injects Rs12.37 trillion to support banking liquidity
In a significant move to stabilize
short-term liquidity in the banking sector, the State Bank of Pakistan (SBP)
injected a total of Rs12.37 trillion into the financial system through dual Open
Market Operations (OMOs) on Friday.
The bulk of the liquidity—Rs12.2
trillion—was provided via a seven-day conventional reverse repo, where banks
placed government securities in exchange for cash. Simultaneously, the central
bank allocated Rs178 billion through a Shariah-compliant Modarabah reverse repo,
aimed at meeting the liquidity needs of Islamic banks.
According to SBP data, the central
bank received Rs12.42 trillion in bids for the conventional OMO, accepting Rs12.2
trillion at a cut-off rate of 11.07%, with bid rates ranging from 11.04% to
11.20%. A total of 26 bids out of 34 were accepted. In the Islamic segment, Rs326
billion in offers were received, with Rs178 billion accepted at 11.13%,
indicating strong market participation in both categories.
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Bank of Pakistan injects Rs1.25 trillion into banks to overcome liquidity
shortages
OMOs are a key monetary policy tool
that allow the SBP to manage liquidity by using instruments like Market
Treasury Bills (MTBs), Pakistan Investment Bonds (PIBs), and Ijara Sukuk (for
Islamic operations). These injections help banks meet daily cash requirements
and maintain statutory liquidity and cash reserve ratios.
The scale of today’s operation
highlights elevated quarter-end liquidity pressures and ongoing tightness in
monetary conditions. By deploying both conventional and Islamic OMOs, the SBP
ensured broad-based support across the financial system, reinforcing its
commitment to financial stability and liquidity management.
Source: Daily Times