KARACHI, October 10, 2025 – The State Bank of Pakistan (SBP) conducted two separate Open Market Operations (OMOs) on Friday, injecting a substantial amount of liquidity into the financial system to manage short-term interest rates and meet the sector-specific needs of banks.
The central bank deployed both its conventional and Shariah-compliant instruments. The conventional reverse repo operation saw significantly higher participation, with the SBP accepting a total of PKR 3.258 trillion at a cut-off rate of 11.01% for both 7-day and 14-day tenors.
In a parallel operation, the SBP injected PKR 193 billion through a Shariah-Compliant Mudarabah-based OMO. Notably, the accepted rate of return for this 7-day injection was set at 11.11%, 10 basis points higher than its conventional counterpart. The 14-day tenor for the Islamic instrument received “No Bids Received” (NBR).
An Open Market Operation (OMO) injection, or reverse repo, is a tool used by a central bank to provide short-term liquidity to commercial banks. By injecting funds, the SBP aims to ensure that the banking system has enough cash to operate smoothly, which helps stabilize the short-term interest rates—a key benchmark for the economy.
The higher rate (11.11%) in the Shariah-compliant operation suggests a slightly tighter liquidity environment or specific demand dynamics within the Islamic banking sector. The massive scale of the conventional operation indicates the SBP is actively managing system liquidity to keep it ample and aligned with its current monetary policy stance.
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