The State Bank of Pakistan (SBP) injected a total of Rs10.31 trillion into the banking system through its Open Market Operation (OMO) on Friday. Of this amount, Rs9.61 trillion was provided through conventional reverse repo OMO, while Rs706 billion was disbursed under Shariah-compliant Modarabah-based OMO.
The reverse repo OMO for a 7-day tenor accepted the entire offered amount of Rs9.61 trillion at a rate of 13.04%, ensuring liquidity for market participants. Similarly, the Shariah-compliant Modarabah OMO, also for 7 days, accepted Rs706 billion out of Rs906 billion offered at a rate of 13.08%.
The Open Market Operation is a monetary tool employed by the SBP to manage liquidity in the banking system. Through injections, the central bank lends funds to banks against eligible collateral, such as Market Treasury Bills (MTBs) or Pakistan Investment Bonds (PIBs), to address liquidity shortages. Conversely, surplus liquidity is mopped up by selling MTBs to banks.
