State Bank of Pakistan Liquidity Injection Amid Eid-ul-Fitr
The operations conducted by the SBP demonstrate its commitment to managing liquidity and stabilizing the economy, which is essential for the country's financial health, especially during significant events and festivals like Eid-ul-Fitr, where financial transactions and exchanges are more frequent.
As Eid-ul-Fitr 2025 approaches, expected to fall on March 31, the State Bank of Pakistan (SBP) has been actively managing liquidity in the banking system through various operations, including reverse repo purchases and Shariah Compliant Mudarabah based Open Market Operations (OMO), injecting significant amounts into the market.
The SBP conducted operations on March 7 and March 14, 2025, injecting a total of Rs 11,645.15 billion and Rs 12.14 trillion, respectively, into the market. These operations included Reverse Repo Purchase for 7-day and 28-day tenors and Shariah Compliant Mudarabah based OMO, with the aim of stabilizing the country's economy. The rates for these operations ranged from 12.06% to 12.12% for the reverse repo and 12.08% to 12.10% for the Shariah-compliant Modarabah-based OMO.
Meanwhile, the tradition of releasing new currency notes for Eid-ul-Fitr, which has been discontinued since the COVID-19 pandemic, is unlikely to resume this year, according to sources. This may lead to currency dealers selling new notes at inflated prices on the black market, affecting those who wish to give new notes as Eidi. The final decision on moon sighting for Eid-ul-Fitr will be made by the Central Ruet-e-Hilal Committee.
The SBP's efforts to manage liquidity and stabilize the economy are crucial, especially during significant events like Eid-ul-Fitr. While the release of new currency notes may not be feasible this year, the central bank's operations aim to ensure a stable financial environment for the country.