The State Bank of Pakistan (SBP) conducted a back to back Open Market Operation (OMO) injection on Tuesday, the second in two days. On Monday the SBP announced a 74-day OMO injection and rejected all 28 bids. On Tuesday, another 73-day OMO injection, expected to mature on the same date, September 18 2022. This OMO offered commercial banks with Rs1.371 trillion of liquidity.Â
Market watchers interpreted this as a sign that the State Bank is struggling to create the conditions to avert another rate hike in tomorrow’s Monetary Policy decision.
Twenty bids were placed ranging from 14.07 percent to 13.87 percent. The SBP offered Rs1.371 trillion but only accepted nine bids worth Rs1.186 trillion at a 13.97 percent annual rate of return.
On Monday, the SBP announced a 74 day OMO. Twenty-eight bids that were placed by participants ranging between 13.97 percent to 13.84 percent to raise Rs1.91 trillion were rejected by the SBP.
Is this sustainable, I mean they are adding 5.8B$ that’s a lot of debt.