The State Bank of Pakistan (SBP) Thursday carried out an Open Market Operation (OMO) to reduce the excess money supply in the banking system.
This was the first time in more than five months that the SBP withdrew Rs 753.3 billion from the market through an OMO.
The central bank sold repurchase agreements (repo) for one day at an interest rate of 21.93%, which was higher than the previous OMO rate of 21.75%.
The amount accepted was less than the amount offered by the banks, which was Rs. 780.8 billion. This indicated that the SBP was selective in choosing the quotes that matched its target interest rate.
The SBP received 17 quotes from commercial banks, ranging from 21.70% to 21.97%, and accepted 12 quotes totaling Rs. 753.3 billion.
The SBP conducts OMOs regularly to manage the liquidity conditions in the market and to align the overnight policy rate with the target rate.
