SBP injects Rs8.09trn into market through OMOs

The State Bank of Pakistan (SBP) injected a total of Rs 8.09 trillion into the market through two types of Open Market Operations (OMOs) on Friday.

The SBP received and accepted bids worth Rs 7.9 trillion for reverse repo OMO from commercial banks for both 7-day and 28-day tenors at a rate ranging from 22.04% to 22.06% per annum, respectively.

The Shariah-compliant Mudarabah-based OMO for the 07-day tenor received four quotes with a range of 22.10 to 22.08%. All four quotes were accepted with a cut-off rate set at 22.08%. 

A total amount of Rs 190 billion was offered and accepted in Mudarabah-based OMO. However, there was no bid received for the 28-day tenor during this operation.

The SBP has been using OMOs as a tool to manage the liquidity conditions in the market and to influence short-term interest rates.

On Thursday, the SBP mopped up Rs 753.3 billion from the market through a reverse repo OMO. This was the first time in more than five months that the central bank withdrew money from the market.