The State Bank of Pakistan (SBP) injected a cumulative Rs11.27 trillion into the market through a combination of conventional reverse repo and Shariah-compliant Modarabah-based Open Market Operations (OMO) conducted on September 11, 2026. Of the total amount, Rs10.67 trillion was injected through conventional reverse repo operations, while another Rs603 billion was provided through the Shariah-compliant OMO. The operation was conducted to address liquidity requirements within the banking system.
Under the conventional OMO, the SBP accepted a total of Rs10.6705 trillion through reverse repo transactions. The operation covered seven-day and 14-day tenors. For the seven-day reverse repo injection, the central bank received and accepted Rs295.5 billion at an accepted rate of 11.54%. The bids for this tenor were submitted within a range of 11.57% to 11.54%, with the entire offered amount being accepted.
The 14-day reverse repo operation attracted Rs10.80475 trillion in offers, of which the SBP accepted Rs10.375 trillion. The accepted rate was 11.51%, while the bids received ranged between 11.56% and 11.51%. The SBP noted that Rs4.32925 trillion out of Rs4.759 trillion offered at 11.51% was accepted on a pro-rata basis. Combined with the seven-day operation, the total conventional liquidity injection reached Rs10.6705 trillion.
The SBP also conducted a Shariah-compliant OMO based on Modarabah, injecting an additional Rs603 billion into the market. The Shariah-compliant operation included seven-day and 14-day transactions. For the seven-day reverse repo injection, Rs11 billion was offered and the full Rs11 billion was accepted at an accepted rate of 11.55%. The bids for this tenor ranged between 11.56% and 11.55%, with two quotes received and both accepted.
For the 14-day Shariah-compliant operation, Rs592 billion was offered and the entire amount was accepted. The bids ranged from 11.56% to 11.54%, while the accepted rate was recorded at 11.51%. A total of seven quotes were received for the 14-day transaction, with all seven accepted. Together with the seven-day operation, the Shariah-compliant OMO resulted in a total injection of Rs603 billion.
The combined injection through conventional and Shariah-compliant operations therefore stood at Rs11.2735 trillion, or approximately Rs11.27 trillion. The operation demonstrates the SBP’s use of OMO as a mechanism for managing liquidity conditions in the banking system. Through these transactions, the central bank provides funds to eligible counterparties against securities or other eligible structures, depending on the type of operation.
Open Market Operations are used by the SBP to inject funds into or withdraw liquidity from the banking system according to prevailing liquidity requirements. In an injection operation, the central bank lends funds to banks and Primary Dealers against eligible collateral. Marketable government securities, including Market Treasury Bills and Pakistan Investment Bonds, can be used as eligible securities for conventional OMO injections.
The SBP also uses OMO transactions to mop up surplus liquidity when excess funds are available within the banking system. In a conventional mop-up operation, the central bank can sell Market Treasury Bills to banks against funds, thereby removing surplus liquidity from the system. For Shariah-compliant liquidity management, government Ijara Sukuk are eligible securities for Bai-Muajjal transactions.
Banks and Primary Dealers are eligible counterparties for conventional OMO transactions, while Islamic banks and specialised Islamic windows of conventional banks can participate in Bai-Muajjal transactions. The latest operation therefore covered both conventional and Shariah-compliant channels, allowing liquidity to be provided across different segments of Pakistan’s banking system.
The September 11 operation resulted in a substantial liquidity injection, with the conventional reverse repo component accounting for the majority of the funds. The SBP injected Rs10.6705 trillion through conventional reverse repo transactions and Rs603 billion through Shariah-compliant Modarabah-based operations. The combined Rs11.27 trillion injection reflects the central bank’s ongoing role in managing liquidity conditions across the banking and Islamic banking systems.
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