SBP injects more than Rs13 trillion to ease liquidity pressure on banks

ISLAMABAD: The State Bank of Pakistan (SBP) pumped Rs13.32 trillion into the banking system on Friday to ease a cash crunch. Most of the money, Rs13 trillion, came through a conventional reverse repo operation.

The rest, about Rs270 billion, was provided under a Shariah-compliant Modarabah-based facility.

These operations are part of the SBP’s routine efforts to manage short-term liquidity. When banks need cash to meet their daily needs, the central bank steps in and lends money against government securities. This move helps banks stay afloat and keeps the financial system stable.

In the latest operation, banks offered to borrow large sums for both one and two weeks. The SBP accepted most of those offers, lending money at rates just above 11 per cent. For Islamic banks, a similar operation was held, with the central bank using GOP Ijara Sukuk as collateral.

The idea behind open market operations is simple. When there isn’t enough cash in the system, the SBP injects money to keep banks running smoothly. When there’s too much, it pulls money back to avoid overheating the economy.

Friday’s injection, one of the largest in recent months, shows that banks were under pressure. By stepping in, the SBP gave them the support they needed to meet short-term demands without disturbing the wider market.

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