State Bank of Pakistan Injects Rs 12.8 Trillion
The injection of liquidity into the market is expected to have a positive impact on the economy, with the SBP's actions aimed at supporting economic growth and stability. The use of Islamic finance tools is also likely to attract Islamic investors and promote the development of the Islamic finance sector in Pakistan.
The State Bank of Pakistan (SBP) has injected a substantial amount of Rs 12.8 trillion into the money market through open market operations (OMOs) to support the financial system, utilizing both conventional and Islamic methods.
The majority of the injection came from reverse repo purchases, with the SBP accepting Rs 11.9 trillion at a fixed rate of 11.03% in the 21-day reverse repo operation, and Rs 521.1 billion at a slightly higher rate of 11.10% in the 7-day operation. Additionally, the SBP used Islamic finance tools, injecting Rs 396 billion through Shariah-compliant Mudarabah OMOs.
The SBP has also been active in the foreign exchange market, making a net foreign exchange (FX) purchase of $223 million in February 2025, representing a $69 million increase from the previous month's $154 million. This brings the total FX interventions by the SBP in the interbank market over the last nine months to $5.9 billion.
The central bank's efforts to support the financial system and stabilize the foreign exchange market are crucial for maintaining economic stability and promoting growth. The SBP's use of both conventional and Islamic finance tools demonstrates its commitment to providing a range of options for market participants and promoting financial inclusion.