SBP injects Rs12.25tr through OMO after rate cut

The State Bank of Pakistan (SBP) on Friday injected more than Rs 12.25 trillion into the banking system through conventional and Shariah-compliant open market operations (OMOs) to manage short-term liquidity conditions.

According to the central bank, SBP conducted a conventional reverse repo OMO on December 19, 2025, accepting Rs 12.35 trillion against total bids of Rs 12.62 trillion for seven-day and 14-day. The accepted rate of return for both tenors stood at 10.51% per annum, reflecting the easing of money market conditions following the recent rate cut.

Under the seven-day time frame, SBP received Rs 1.27 trillion, while the bulk of liquidity – Rs 11.08 trillion – was channeled through the 14-day time frame, indicating banks’ preference for relatively longer-term funding.

Separately, the central bank also conducted Shariah-compliant Mudaraba-based OMOs on the same day, infusing Rs81 billion into Islamic banks. SBP accepted the entire amount offered for both 7-day and 14-day with yield rates of 10.57% and 10.56%, respectively.

Meanwhile, gold prices in Pakistan fell on Friday, tracking subdued movement in the international gold market, where a firmer US dollar and a rise in government yields dampened demand for the non-yielding metal. Despite the drop, prices stayed on course with weekly gains.

In the local market, the price of gold per tola fell by Rs 900 to Rs 454,862, according to prices issued by the All-Pakistan Gems and Jewelers Sarafa Association (APGJSA). Similarly, 10 gram gold price fell by Rs 772 to Rs 389,970. On Thursday, gold prices had soared, with the rate per tola increasing by Rs 2,200 to Rs 455,762.

Silver prices also registered a decline, shedding Rs 52 to close at Rs 6,848 per tola.

In the international market, spot gold edged up 0.1 percent to $4,338.37 an ounce by 1505 GMT, but was still up about 0.9 percent for the week. U.S. gold futures also rose 0.1 percent to $4,370.10 an ounce, according to Reuters.

For next year, various research houses predict gold prices from 4,800 to 5,100 dollars.

Commenting on the market dynamics, Adnan Agar, Director of Interactive Commodities, said that different price targets between analysts and brokers do not necessarily indicate contradictions, but reflect different economic models and assumptions. He noted that, as with stocks, commodity markets often see a wide range of forecasts, with investor sentiment ultimately driven by potential upside or downside potential.

Agar added that despite expectations for relatively lower targets next year due to increased current prices, gold remains at historically high levels. He pointed out that limited trading during the year-end holiday season could keep markets subdued, but could also trigger unexpected upside moves. Given current trends, he said gold could potentially test new all-time highs in the coming weeks, possibly around late December or early January, as global markets enter a quieter phase.

Meanwhile, the Pakistan rupee edged higher against the US dollar in the interbank market on Friday, closing at 280.25 after appreciating by Re0.01. The local currency had ended the previous session at 280.26.