The State Bank of Pakistan (SBP) injected a total of Rs12.38 trillion into the banking system through conventional and Shariah-compliant Open Market Operations (OMO) on Friday to address short-term liquidity requirements.

Under the conventional reverse repo operation, the central bank injected Rs11.91 trillion. Of this, Rs163.1 billion was provided through a 7-day tenor at an accepted rate of 11.54%, while Rs11.75 trillion was injected through a 14-day tenor at 11.51%. The SBP accepted Rs5.24 trillion out of Rs5.44 trillion quoted at the cutoff rate of 11.51% on a pro-rata basis.

The central bank also injected Rs471 billion through its Shariah-compliant Modarabah-based OMO. This included Rs71 billion under the 7-day tenor at 11.56% and Rs400 billion through the 14-day tenor at an accepted rate of 11.52%. At the cutoff rate, the SBP accepted Rs146.1 billion out of Rs252 billion offered on a pro-rata basis.

Open Market Operations are a key monetary policy tool used by the SBP to manage liquidity in the banking system. Under reverse repo operations, the central bank provides short-term funds to banks and primary dealers against eligible government securities, helping ensure adequate liquidity in the financial system.

For Islamic banks, the SBP conducts liquidity management through Modarabah-based OMO, using Government of Pakistan Ijara Sukuk as eligible collateral, providing Shariah-compliant funding to Islamic financial institutions.