OMO: SBP injects Rs1.2 trillion for 73 days

July 5, 2022 (MLN): State Bank of Pakistan on Tuesday injected Rs1.2 trillion into the money market through reverse repo purchase and Shariah-compliant mudarabah-based open market operation.

As per the SBP statement, through reverse repo purchase operation, the injected amount was Rs1.18 trillion for 73 days at a 13.97% rate of return accepted per annum.

While, the amount injected through Shariah-compliant mudaraba-based operation was Rs3 billion, for 73 days at a 13.99% rate of return accepted per annum.

Twenty bids were placed by participants for reverse repo purchases ranging between 14.07% to 13.87% to raise Rs1.37 trillion. However, SBP accepted 86% of the bids (9 bids) offering Rs1.18 trillion.

For Shariah-compliant mudarabah-based OMO,  7 bids were received to raise Rs59 billion, of which SBP accepted only 1 bid worth Rs3 billion.

To recall, in yesterday’s OMO, SBP rejected all bids amounting to Rs1.9 trillion which were offered for a 74-day reverse-repo purchase (Injection).

SBP usually conducts longer tenure OMO to ease liquidity constraints of banks and bring down secondary market yields.

Currently, the 6M KIBOR is hovering at 15.3%, whereas 3M and 6M PKRV reached 14.9% and 15.17%, respectively.

To note, SBP’s monetary policy is scheduled for July 7, 2022, wherein the Central Bank is expected to increase the policy rate to arrest the sharp rise in consumer prices and slow down the overheated economy.

Presently, the policy rate stands at 13.75%.

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