The State Bank of Pakistan (SBP) injected a massive Rs12.34 trillion into the financial system on Friday through conventional and Shariah-compliant Open Market Operations (OMOs), aiming to ease liquidity pressures in the banking sector.
The move included Rs12.01 trillion through a standard Reverse Repo Purchase operation and Rs328.5 billion via Mudarabah-based OMOs, a Shariah-compliant tool increasingly used by Islamic banks.
Details of the Reverse Repo Injection
For the conventional OMO, the SBP accepted all 27 bids it received for a 14-day tenor, amounting to Rs11.82 trillion. These funds were provided at a uniform rate of 11.01%.
In addition, the central bank cleared four bids for a 7-day tenor worth Rs191 billion, settling them at 11.06%. The acceptance of every submitted bid underscores SBP’s commitment to ensuring ample market liquidity ahead of month-end settlements.
Islamic Banking Liquidity Support
In a parallel Shariah-compliant operation, the SBP conducted a Mudarabah-based OMO, splitting liquidity injections between 7- and 14-day tenors.
- 14-day tenor: Two bids totaling Rs172 billion were accepted at 11.13%.
- 7-day tenor: Three bids worth Rs156.5 billion were cleared at 11.14%.
This growing reliance on Islamic liquidity tools reflects the increasing participation of Shariah-compliant banks in Pakistan’s financial system.
Why It Matters
The SBP’s large-scale liquidity injection signals persistent tightness in the interbank market, partly due to higher policy rates and ongoing government borrowing needs. By aggressively accepting bids across both conventional and Islamic instruments, the central bank is providing breathing room to commercial banks, ensuring they can meet short-term funding obligations without triggering volatility in overnight lending rates.
Analysts say this level of liquidity support suggests the SBP remains focused on financial system stability while balancing inflation control measures.
