The State Bank of Pakistan (SBP) on Friday injected a total of Rs12.37 trillion into the financial system through Open Market Operations (OMOs), aimed at addressing short-term liquidity needs in the banking sector.
The bulk of the liquidity — Rs12.2 trillion — was provided via a conventional seven-day reverse repo OMO, while an additional Rs178 billion was extended through a Shariah-compliant Modarabah-based OMO, according to official auction results released by the central bank.
In the conventional OMO, banks offered Rs12.42 trillion worth of bids, of which SBP accepted Rs12.2 trillion at a cut-off rate of 11.07%, with quotes ranging between 11.20% and 11.04%. A total of 26 quotes were accepted out of 34 received.
Separately, in the Islamic OMO, the central bank received Rs326 billion in offers for a seven-day Modarabah-based reverse repo. It accepted Rs178 billion at a cut-off rate of 11.13%, with the range of quotes between 11.14% and 11.13%. Both received quotes were accepted.
Open Market Operations are a key liquidity management tool used by SBP to ensure monetary stability and smooth functioning of the interbank market. Through OMOs, the central bank either injects or mops up funds depending on prevailing liquidity conditions.
In injection OMOs, the SBP provides funds to commercial banks and Primary Dealers (PDs) against collateral — typically Market Treasury Bills (MTBs), Pakistan Investment Bonds (PIBs), or Ijara Sukuk in the case of Islamic transactions. The liquidity support helps banks manage their short-term obligations and maintain regulatory reserve requirements.
The large scale of today’s operation signals a significant liquidity demand in the interbank market, possibly driven by quarter-end payment obligations or continued tightness in the monetary system under a contractionary policy regime.
This dual-mode liquidity support — encompassing both conventional and Islamic instruments — reflects SBP’s parallel management of liquidity needs in both banking segments as part of its broader financial stability mandate.
