SBP injects over Rs10.7 trillion liquidity into banks as borrowing needs rise

The State Bank of Pakistan (SBP) injected more than Rs10.7 trillion into the banking system on Friday through conventional and Sharia-compliant open market operations to meet elevated liquidity needs driven by higher government borrowing.

According to the SBP’s OMO results, the central bank accepted Rs10.57 trillion through the conventional window. Most of this was placed in the 14-day tenor, where Rs10.2 trillion was injected at 11.01 per cent on a pro-rata basis. The seven-day tenor saw full acceptance of Rs368 billion at 11.02 per cent.

Through the Islamic Mudarabah-based OMO, the central bank injected another Rs212 billion. Banks received Rs200 billion in the seven-day tenor at 11.04 per cent, while the remaining amount was accepted in the 14-day tenor at 11.06 per cent.

Market analysts said the size and structure of the injections reflected aggressive liquidity demand from banks amid rising government borrowing. They noted that rates in the Islamic window remained only slightly above conventional cut-offs, consistent with historical trends.

They said the liquidity situation appeared stable but dependent on regular injections, with markets now focused on the December Monetary Policy Committee meeting. The SBP is widely expected to keep the policy rate unchanged at 11 per cent, with recent inflation upticks limiting room for further easing.