Is it Koonda time yet?

To cut the story short, until we have the 63-day Open Market Operations (OMOs) injections, there is no Koonda.

Essentially, Koonda is when the banks have to give in to the government and loan out money to it on cheap rates or hold onto money in a high inflationary environment. Despite that, it seems like banks are still strong arming the government and the State Bank of Pakistan (SBP). This can be shown by the fact that four 63-day OMOs were conducted. Two of them are yet to mature.

63-day OMOs = Party for banks

Earlier this month, two of the 63-day OMO injections matured. In case you forgot, On December 17, the SBP introduced a 63 day OMO injection in addition to the usual 7 day injection. Through this injection, the SBP accepted quotes Rs1,086 billion at 9.82% in 7 days tenor, and Rs689 billion at 9.9% in 63 days. On December 24, 2020 it conducted an injection of the usual 7 day tenor and the 63 day tenor, for the second time with a maturity date of February 25, 2022. The third 63-day OMO came in on 31 December with a maturity date of 4th March injecting Rs 274 billion. The Fourth and so far the last 63-day OMO injection was done on 7th January 2022 injecting Rs 424 billion into the market which will mature on 11 March 2022.

As per data available from 2008, this is the largest maturity cycle for an OMO. The previous high was 17 days in August 2011. This is relatively a fraction of 63 days which was injected on 17 December 2021, and again on 24 December 2021.