The State Bank of Pakistan (SBP) conducted a major liquidity operation on February 13, 2026, injecting a total of Rs12.89 trillion into the banking system through a combination of conventional reverse repo and Shariah-compliant Modarabah-based Open Market Operations (OMO). This move reflects the central bank’s ongoing efforts to manage liquidity and ensure stability in Pakistan’s financial markets.
Under the conventional OMO, the SBP injected Rs12.62 trillion into the market. Of this, Rs206.5 billion was deployed via a seven-day reverse repo, while a significant Rs12.2 trillion was injected through a fourteen-day reverse repo operation. Accepted rates for these operations ranged between 10.51% and 10.59%, demonstrating market confidence in the central bank’s liquidity support. These injections allow banks and primary dealers to access funds against eligible collateral, such as Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs), thereby addressing liquidity shortages and maintaining operational continuity in the financial system.
Alongside conventional injections, the SBP also deployed Rs488.5 billion through Shariah-compliant Modarabah-based OMO, utilizing instruments like Bai-Muajjal transactions. Of this amount, Rs405.5 billion was offered through a seven-day reverse repo and Rs83 billion through a fourteen-day tenor. Accepted rates ranged from 10.51% to 10.55%, ensuring alignment with Islamic banking principles. Government-issued Ijara Sukuk served as eligible securities for these transactions, allowing Islamic banks and specialized windows of conventional banks to participate.
Open Market Operations are critical tools for SBP to regulate money supply in line with liquidity requirements. In injection operations, the SBP lends funds to banks and primary dealers against approved securities to alleviate short-term liquidity shortages. Conversely, in mop-up operations, the central bank sells MTBs to absorb excess liquidity from the system. These operations are essential in balancing short-term funding, controlling inflationary pressures, and supporting the stability of Pakistan’s banking system.
The combination of conventional and Shariah-compliant injections highlights SBP’s dual approach in managing liquidity for both conventional and Islamic banking sectors. By using tools such as reverse repo and Bai-Muajjal, the central bank ensures all segments of the financial system have access to short-term liquidity while maintaining compliance with Shariah guidelines.
Financial analysts observe that such large-scale liquidity injections play a pivotal role in stabilizing interbank rates, supporting credit flows, and ensuring that banks can meet their operational and lending requirements. Market participants also view these operations as signals of the SBP’s proactive stance in maintaining orderly financial markets and sustaining confidence in Pakistan’s banking system.
Overall, SBP’s strategic deployment of Rs12.89 trillion through conventional and Shariah-compliant OMO underscores its commitment to managing liquidity, supporting financial stability, and fostering a resilient banking ecosystem capable of addressing both conventional and Islamic banking needs.
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