SBP injects Rs 8.93trn into market through OMOs

The State Bank of Pakistan (SBP) on Friday injected a total of Rs 8.93 trillion into the market through reverse repo and Shariah-compliant Open Market Operations (OMOs). 

The OMOs were aimed at providing liquidity support to the banking system and maintaining the policy rate at 22%.

The conventional OMO included three tenors: 7-day, 14-day, and 28-day, with rates ranging from 22.05% to 22.10%. 

The SBP accepted all 43 quotes offered by the participants, indicating a strong demand for liquidity in the market. 

The 28-day tenor attracted the most interest, with 31 quotes offered and accepted, totaling Rs 8.5 trillion. 

Cumulatively, Rs 8.66 trillion were injected through reverse repo OMO.

The Shariah-compliant OMO was based on Mudarabah principle and received bids for two tenors: 7-day and 14-day, with rates ranging from 22.07% to 22.12%. 

The SBP also accepted all the quotes offered by the participants, totaling Rs 273 billion. However, there were no bids received for the 28-day tenor.

The OMOs were part of the SBP’s regular monetary operations to manage the money supply and interest rates in the economy. The SBP has been conducting OMOs frequently in recent months, as the economy faces challenges rising inflation, and external pressures.