The State Bank of Pakistan (SBP) injected a combined Rs3.025 trillion into the banking system through conventional and Shariah-compliant open market operations conducted on October 16, 2026. According to the central bank’s auction results, the liquidity operations included Rs2.665 trillion accepted through conventional reverse repo purchase operations and Rs360.5 billion through Shariah-compliant Mudarabah-based injections. The transactions provided short-term liquidity to banks through both conventional and Islamic financing arrangements.
The conventional open market operations attracted bids worth Rs3.190 trillion, of which the SBP accepted Rs2.665 trillion across seven-day and 14-day tenors. These operations allow the central bank to provide liquidity to financial institutions for specified periods, supporting the management of short-term funding conditions in the banking system. The accepted amounts reflected the bids selected by the central bank under the terms of the respective operations.
For the seven-day conventional tenor, the SBP accepted Rs2.4 trillion against offers of Rs2.925 trillion at an annualised rate of return of 11.51%. The operation received substantial demand from participating institutions, with the central bank accepting only part of the amount offered. The seven-day tenor accounted for the largest share of the conventional liquidity injection conducted during the auction.
Under the 14-day conventional tenor, the central bank accepted the entire offered amount of Rs264.75 billion at an annualised rate of return of 11.54%. The difference between the rates offered for the two tenors reflected the pricing applied to the respective liquidity arrangements. Together, the seven-day and 14-day operations accounted for the total conventional acceptance of Rs2.665 trillion on a face-value basis.
The conventional operations attracted 17 bids, all of which were accepted either in full or in part. According to the auction results, Rs2.419 trillion had been offered at the seven-day rate of 11.51%, of which Rs1.894 trillion was accepted on a pro-rata basis. This allocation meant that the accepted amount was distributed proportionately among eligible bids rather than meeting every offer in full. The results illustrate the level of demand for short-term liquidity through the central bank’s conventional operations.
Alongside the conventional transactions, the SBP accepted the full Rs360.5 billion offered through Shariah-compliant Mudarabah-based open market operations. These arrangements provide liquidity through a structure designed to comply with Islamic finance principles. Their inclusion allows eligible Islamic banking institutions to access short-term liquidity through a Shariah-compliant mechanism rather than relying exclusively on conventional interest-based arrangements.
Of the accepted Islamic liquidity amount, Rs70.5 billion was provided for seven days at an annualised return of 11.55%. The remaining Rs290 billion was accepted for a 14-day tenor at an annualised return of 11.56%. The larger share of the Islamic injection was therefore allocated to the longer of the two available tenors in this operation.
The Shariah-compliant auction received five bids, including three for the seven-day tenor and two for the 14-day tenor. The SBP accepted all five bids, meeting the full amount offered through the Islamic operations. The outcome indicates that the entire submitted amount was accommodated under the terms of the Mudarabah-based arrangements.
The central bank also reported the realised value of the liquidity provided, which differed from the face-value amounts accepted in the auction. On a realised-value basis, the conventional injection amounted to Rs2.585 trillion, while the Shariah-compliant injection totalled Rs360.779 billion. The combined realised value was approximately Rs2.946 trillion, compared with the combined face value of Rs3.025 trillion.
The distinction between face value and realised value is important when reviewing open market operation results, as the figures reflect different measures of the transactions. The headline acceptance amount represents the face value of the operations, while the realised-value figures show the corresponding amounts on the basis reported by the central bank. Both sets of figures help describe the scale of liquidity supplied through the two mechanisms.
The October 16 operations highlight the SBP’s use of conventional and Islamic instruments to manage short-term liquidity conditions in Pakistan’s banking system. The conventional transactions accounted for the larger portion of the total injection, while the Mudarabah-based operations provided a separate channel for Shariah-compliant liquidity support. The auction results detail the accepted amounts, tenors and annualised rates but do not, by themselves, establish the broader impact on lending, inflation or overall monetary conditions. Further central bank operations and market data will provide additional context on liquidity developments in the banking sector.
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