You are currently viewing SBP Injects Massive Rs12.84 Trillion into Money Market
Representation image: This image is an artistic interpretation related to the article theme.

SBP Injects Massive Rs12.84 Trillion into Money Market

The State Bank of Pakistan (SBP) has undertaken a significant injection of liquidity into the money market through a unique blend of Shariah-compliant and conventional Open Market Operations (OMOs). This substantial injection was aimed at maintaining financial stability and supporting economic growth.

  • The SBP deployed a Shariah-compliant Mudarabah-based OMO, injecting Rs550.2 billion into the system.
  • This consisted of:
    • Rs363.2 billion for 7 days at a 12.09% interest rate
    • Rs187 billion for 14 days at a 12.10% interest rate
  • The SBP also conducted a larger conventional reverse repo operation, adding Rs12.29 trillion to the system.
  • This included:
    • Rs673.55 billion for 7 days at a 12.09% interest rate
    • A staggering Rs11.62 trillion for 14 days at a 12.08% interest rate
  • Conventional instruments accounted for 95.7% of the total injection, while Islamic finance tools represented just 4.3% of the liquidity provision.
    1. **Islamic finance contribution**: The Shariah-compliant instruments played a vital role in supporting the financial system.
    2. **Conventional instruments dominance**: The conventional instruments dominated the market, reflecting the central bank’s focus on maintaining financial stability.
    Conventional Instruments Amount (Rs) Percentage of Total Injection
    Reverse Repo Operation 12,290,000,000,000 95.7%
    Mudarabah-based OMO 550,200,000,000 4.3%

    The SBP’s injection of liquidity has helped to inject confidence into the financial system and support economic growth. The central bank’s efforts are crucial in maintaining financial stability and ensuring the stability of the economy.

    “Such a large jump per tola has never occurred before, making it a new milestone for both local and international markets,”

    Abdullah Abdul Razzaq, a representative of the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), described the recent gains in gold prices. The gold price surged by a record Rs178,000 in two days, bringing the per tola rate to Rs338,800. Global market analysts attribute the spike in gold prices to a weakening US dollar and rising recession fears, fueled by escalating trade tensions between the US and China.
    The global gold market saw a significant surge in prices, with the rate reaching $3,218 per ounce. The international market witnessed a $100 jump in gold prices in a single day, reflecting the growing investor demand for safe-haven assets. Historic gold price surge
    The recent gains in gold prices are a testament to the growing demand for safe-haven assets. Investors are turning to gold as a traditional safe-haven asset amid economic uncertainty and geopolitical risks. The Pakistani rupee posted a modest gain against the US dollar on Friday, appreciating by 0.03% in the inter-bank market. By the end of the trading session, the rupee closed at 280.47, marking an increase of Rs0.09 compared to Thursday’s closing rate of 280.56.

    Leave a Reply