The State Bank of Pakistan (SBP) injected Rs10.83 trillion into the banking system through reverse repo and Shariah-compliant Modarabah-based Open Market Operations (OMOs) conducted on September 25, 2026. The latest liquidity operation included Rs10.2579 trillion through conventional reverse repo transactions, while another Rs569.1 billion was provided through the Shariah-compliant facility.
Under the conventional reverse repo OMO, SBP accepted the full Rs564.8 billion offered for the seven-day tenor at an accepted rate of 11.54%. The transaction attracted 10 quotes, all of which were accepted. For the 14-day tenor, banks and primary dealers offered Rs9.6931 trillion, with the central bank accepting the entire amount at an accepted rate of 11.51%. A total of 36 quotes were received and all were accepted. The combined amount injected through the two conventional reverse repo tenors stood at Rs10.2579 trillion.
The central bank also conducted a Shariah-compliant Modarabah-based OMO to provide liquidity to participants in the Islamic banking system. Under the seven-day tenor, Rs26.1 billion was offered and the entire amount was accepted at 11.54%, with five quotes submitted and accepted. For the 14-day tenor, participants offered Rs583 billion, while SBP accepted Rs543 billion at an accepted rate of 11.54%. Six quotes were received and accepted for the transaction. SBP noted that Rs100 billion out of Rs140 billion offered at 11.54% was accepted on a pro-rata basis. The total amount injected through the Shariah-compliant operation was Rs569.1 billion.
Open Market Operations are among the monetary tools used by SBP to manage liquidity conditions within the banking system. Through these operations, the central bank can inject funds when liquidity is tight or absorb surplus funds when excess liquidity is available. In an OMO injection, SBP provides funds to banks and primary dealers against eligible collateral, helping address temporary liquidity requirements across the financial system.
For conventional OMO injections, eligible collateral includes marketable government securities such as Market Treasury Bills and Pakistan Investment Bonds. In an OMO mop-up operation, SBP moves in the opposite direction by selling eligible securities to banks against funds, thereby removing surplus liquidity from the banking system. Such transactions can be conducted through repo or outright arrangements depending on the operational requirements.
SBP also uses Shariah-compliant liquidity management tools for the Islamic banking sector. In Bai-Muajjal transactions, Government of Pakistan Ijara Sukuk serve as eligible securities. Islamic banks and specialized Islamic windows of conventional banks can participate as counterparties in Bai-Muajjal transactions, while banks and primary dealers are eligible counterparties for conventional OMO transactions.
The September 25 operation reflects the central bank’s continued use of liquidity management operations to address funding requirements in the banking system. The Rs10.83 trillion injection was largely concentrated in the 14-day conventional reverse repo facility, which accounted for Rs9.6931 trillion of accepted funds, while the remaining amount was distributed across the seven-day conventional and Shariah-compliant facilities.
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