The State Bank of Pakistan (SBP) injected Rs425 billion into the banking system on February 23, 2026, through a combination of conventional reverse repo and Shariah-compliant Modarabah-based Open Market Operations (OMO), as part of its routine liquidity management framework. The move reflects the central bank’s ongoing efforts to maintain orderly market conditions and address short-term funding requirements within the financial system.
According to the OMO results, Rs75 billion was injected via a 4-day reverse repo operation under the conventional window. Against an offered amount of Rs381,050 million, the SBP accepted Rs75,000 million at an accepted rate of 10.55 percent, with quoted rates ranging between 10.57 percent and 10.51 percent. A total of nine quotes were submitted, of which five were accepted. Notably, the total amount offered at 10.55 percent stood at Rs329,500 million, out of which Rs60,000 million was accepted on a pro-rata basis, reflecting partial allocation at the cutoff rate.
In parallel, the central bank deployed Rs350 billion through a 4-day Shariah-compliant Modarabah-based reverse repo operation. Under this window, Rs396,000 million was offered by participants, with Rs350,000 million accepted at a cutoff rate of 10.54 percent. Quoted rates ranged from 10.58 percent to 10.54 percent, and all six submitted bids were accepted. Of the total Rs220,000 million offered at the cutoff rate of 10.54 percent, the SBP accepted Rs174,000 million on a pro-rata basis, indicating competitive participation in the Islamic liquidity facility.
Open Market Operations serve as a primary monetary policy instrument used by the SBP to either inject or absorb liquidity from the banking system, depending on prevailing market conditions. In injection operations such as this, the central bank provides short-term funds to banks and primary dealers against eligible collateral to address liquidity shortages. These transactions help stabilize short-term interest rates and ensure smooth functioning of money markets.
For conventional OMO injections, eligible securities include marketable government instruments such as Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs). Banks and primary dealers pledge these securities as collateral in exchange for liquidity support from the central bank. Conversely, in mop-up operations, the SBP sells MTBs—either on a repo or outright basis—to absorb surplus funds from the system.
Within the Islamic banking framework, the SBP utilizes Shariah-compliant instruments to manage liquidity. In the case of Modarabah-based OMOs and Bai-Muajjal arrangements, Government of Pakistan (GOP) Ijara Sukuk serve as eligible collateral. Islamic banks and dedicated Islamic banking windows of conventional banks are authorized counterparties in these transactions, ensuring alignment with Shariah principles while maintaining parity with conventional liquidity tools.
The combined Rs425 billion injection signals the central bank’s active liquidity stance amid short-term funding dynamics in the interbank market. By calibrating both conventional and Islamic liquidity windows, the SBP continues to maintain operational flexibility across the dual banking structure, supporting financial stability while aligning with its broader monetary policy objectives.
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