November 22, 2024 (MLN): The State Bank of Pakistan (SBP) conducted a reverse repo and Shariah Compliant Modarabah based Open Market Operation (OMO) today, in which it cumulatively injected a total of Rs2.25 trillion into the market. Of which Rs2.1tr were injected through reverse repo OMO.
| Summary of OMO Result (Conventional) | |||||||
|---|---|---|---|---|---|---|---|
| Amount (Rs in Million) | Rate (%) | Quotes | |||||
| Tenor | Type | Offered | Accepted | High – Low | Accepted | Offered | Accepted |
| 7D | Reverse Repo (Injection) | 2,417,400 | 2,100,000 | 15.10 – 15.05 | 15.05 | 15 | 15 |
| 28D | Reverse Repo (Injection) | NBR | – | – | – | – | – |
| Total | 2,417,400 | 2,100,000 | |||||
Meanwhile, the remaining Rs149 billion was injected through Shariah-compliant Modarabah-based OMO.
| Summary of OMO Result (Shariah) | |||||||
|---|---|---|---|---|---|---|---|
| Amount (Rs in Million) | Rate (%) | Quotes | |||||
| Tenor | Type | Offered | Accepted | High – Low | Accepted | Offered | Accepted |
| 7D | Reverse Repo (Injection) | 149,000 | 149,000 | 15.12 – 15.08 | 15.08 | 3 | 3 |
| 28D | Reverse Repo (Injection) | NBR | – | – | – | – | – |
| Total | 149,000 | 149,000 | |||||
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.
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