The State Bank of Pakistan (SBP) injected a cumulative Rs12.56 trillion into the market through reverse repo and Shariah compliant Modarabah based Open Market Operations conducted on August 17, 2026. The latest OMO was aimed at managing liquidity conditions within the banking system, with the central bank providing funds to eligible counterparties against qualifying securities. Out of the total amount injected, Rs11.93 trillion was provided through conventional reverse repo OMO, while the remaining Rs627 billion was injected through the Shariah compliant Modarabah based OMO.
Under the conventional OMO, the SBP accepted a total of Rs11.9315 trillion through reverse repo transactions. The operation included four day and 11 day tenors. For the four day reverse repo, Rs31.5 billion was offered and the full amount was accepted at an accepted rate of 11.54%. The quoted rate ranged between 11.56% and 11.54%. The 11 day reverse repo attracted offers amounting to Rs12.06855 trillion, of which the SBP accepted Rs11.9 trillion. The accepted rate for the 11 day transaction stood at 11.51%, with the quoted rates ranging between 11.57% and 11.51%.
The SBP also provided details regarding the allocation of the 11 day conventional reverse repo transaction. A total amount of Rs5.6527 trillion was offered at the rate of 11.51%, while the central bank accepted Rs5.48415 trillion on a pro rata basis. Combined with the four day operation, the total conventional liquidity injection reached Rs11.9315 trillion. The scale of the latest operation reflects the significant amount of liquidity being supplied through the central bank’s conventional market operations.
Meanwhile, the SBP injected another Rs627 billion through its Shariah compliant Modarabah based OMO. The Shariah compliant operation also consisted of four day and 11 day reverse repo transactions. For the four day tenor, Rs50 billion was offered and the entire amount was accepted at a rate of 11.56%. The quoted rates for the transaction ranged between 11.58% and 11.56%. For the 11 day tenor, participating institutions offered Rs676 billion, while the SBP accepted Rs577 billion at an accepted rate of 11.52%. The quoted rates for this transaction ranged from 11.56% to 11.51%.
The four day and 11 day Shariah compliant transactions together resulted in a total injection of Rs627 billion. When combined with the Rs11.9315 trillion provided through the conventional reverse repo operation, the overall liquidity injection conducted by the SBP reached Rs12.5585 trillion, or approximately Rs12.56 trillion. The operation covered both conventional and Islamic banking channels, allowing the central bank to address liquidity requirements across the banking system.
Open Market Operations are among the monetary and liquidity management tools used by the SBP to inject funds into or withdraw liquidity from the banking system. In an OMO injection, the central bank provides funds to banks and Primary Dealers against eligible collateral. The mechanism is designed to address liquidity shortages within the financial system while allowing participating institutions to manage their short term funding requirements.
For conventional OMO injections, eligible collateral includes marketable government securities such as Market Treasury Bills and Pakistan Investment Bonds. These securities are used in transactions through which the SBP provides liquidity to eligible counterparties. Banks and Primary Dealers are eligible to participate in conventional OMO transactions conducted by the central bank.
The SBP also uses OMO mechanisms for removing surplus liquidity from the financial system. In an OMO mop up operation, the central bank sells Market Treasury Bills to banks in exchange for funds, thereby reducing excess liquidity in the market. Such transactions can be conducted through repo or outright arrangements involving eligible government securities.
For liquidity management within the Islamic banking system, the SBP uses Shariah compliant mechanisms, including Bai Muajjal. Government of Pakistan Ijara Sukuk are eligible securities for these transactions. Islamic banks and specialised Islamic windows of conventional banks are eligible counterparties for Bai Muajjal transactions, allowing the central bank to manage liquidity while maintaining Shariah compliant structures.
The latest Rs12.56 trillion injection therefore represents a combination of conventional and Shariah compliant liquidity operations. With Rs11.93 trillion supplied through conventional reverse repo transactions and Rs627 billion through the Modarabah based operation, the SBP has provided substantial liquidity to participating banks and financial institutions. The OMO results provide an indication of the central bank’s ongoing role in managing liquidity conditions and supporting the functioning of Pakistan’s banking system.
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