Qudsia Bano

The State Bank of Pakistan (SBP) conducted an Open Market Operation (OMO) on January 9, carrying out Reverse Repo Purchase (injection) to manage liquidity conditions in the financial system. The operation comprised both conventional and Shariah-compliant Mudarabah-based reverse repos, with strong participation across both segments.

In the conventional OMO, market participants offered a total of Rs1,296,100 million. Under the seven-day tenor, offers amounted to Rs545,600 million, of which Rs521,623 million were accepted at an interest rate of 10.52% per annum. For the 14-day tenor, Rs750,500 million were offered and Rs734,412 million accepted at a rate of 10.53% per annum. Overall, the SBP accepted Rs1,256,035 million in the conventional segment, with nine quotes offered and accepted, indicating steady market engagement and a stable interest rate environment.

The Shariah-compliant Mudarabah-based reverse repo attracted offers of Rs294,000 million, with Rs293,000 million accepted. At a seven-day tenor, Rs284,000 million were offered and Rs283,100 million accepted at a return rate of 10.55% per annum. Meanwhile, the 14-day tenor saw offers of Rs10,000 million, of which Rs9,900 million were accepted at a return rate of 10.54% per annum. Participation in the Shariah-compliant operation was comparatively lower, with three quotes offered and accepted across both tenors.

Through these liquidity injections, the SBP aims to ensure adequate funding for financial institutions while maintaining orderly market conditions. The successful execution of both conventional and Shariah-compliant OMOs underscores the central bank’s use of its monetary tools to support liquidity management and market stability.

Credit: INP-WealthPk