September 05, 2024 (MLN): The State Bank of Pakistan (SBP) conducted a reverse repo based Open Market Operation (OMO) today, in which it cumulatively injected a total of Rs1.03 trillion into the market.
Summary of OMO Result (Conventional)
Amount (Rs in Million)
Rate (%)
Quotes
Tenor
Type
Offered
Accepted
High – Low
Accepted
Offered
Accepted
8D
Reverse Repo (Injection)
1,033,800
1,033,800
19.62 – 19.56
19.56
14
14
Total
1,033,800
1,033,800
Explanatory Note
Open Market Operation is a tool used by SBP to inject or mop-up funds, based on the liquidity requirements, from the banking system via the purchase or sale of eligible securities.
Operationally, in case of OMO (Injections), SBP lends funds to banks/Primary Dealers (PDs) against eligible collateral to address liquidity shortage in the system.
For OMO (Injections), marketable government securities, i.e. Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs) are eligible securities.
In OMO (Mop-up), SBP sells MTBs to banks against funds to remove surplus liquidity from the system.
Eligible collateral for OMO (Mop-up) includes selling MTBs (on repo or outright basis) to banks for removing excess liquidity from the system.
In case of Bai-Muajjal, a Shariah compliant tool for managing liquidity in the Islamic banking system, GOP Ijara Sukuk are eligible securities.
Banks and PDs are eligible counterparties to OMO transactions. For Bai Muajjal transactions, Islamic banks and specialized Islamic windows of conventional banks are eligible counterparties.
