SBP pumps Rs 10.48 trillion into banks

The State Bank of Pakistan (SBP) on Friday made significant liquidity injections through both conventional and Shariah-compliant open market operations (OMOs), providing more than Rs 10.48 trillion in short-term funds to indirectly meet the government’s needs.

According to the central bank’s Department of Internal Markets and Monetary Management, the SBP accepted a total of Rs 10.27 trillion in the conventional reverse repo (injection) mode. The central bank saw significant participation from market participants in two periods, reflecting persistent demand for short-term liquidity in the banking system.

During the seven-day period, banks offered bids of Rs 10.13 trillion, which were accepted by the SBP at a rate of return of 11.01% per annum, with 19 secured rates. For the 14-day period, Rs 140.65 billion were offered and fully accepted at 11.02%, based on four prices. The combined realized value for both tenors stood at Rs 9.87 trillion.

SBP also conducted a Shariah-compliant Mudarabah-based OMO injection aimed at supporting Islamic banking institutions facing tight liquidity positions. The total amount accepted under the Islamic OMO reached Rs 214.7 billion against bids of Rs 290.7 billion.

In the seven-day period, the central bank accepted Rs189.7 billion for an annual return of 11.05%, while a bid worth Rs25 billion was accepted in the 14-day for 11.06%. The total realized value for Islamic OMO was Rs 215 billion.

Additionally, the Pakistan rupee edged up, depreciating 0.01% to close at 280.32 against the US dollar, gaining Rs 0.04 in the interbank market. This follows Thursday’s close of 280.36, reflecting continued stability in the local currency.

Meanwhile, gold prices in Pakistan rose even as the global market retreated from a seven-week high on currency pressures and persistent local demand. According to the Sarafa Gems and Jewelers Association of Pakistan, the price of gold per tola increased by Rs 10,700 to Rs 454,262, while 10 gram gold rose by Rs 9,174 to Rs 389,456. This follows Thursday’s modest rise, when the price per tola stood at Rs 443,562.

Silver prices in the domestic market also gained traction, rising from Rs 232 to Rs 6,684 per tola. The trend contrasted sharply with global markets, where silver fell more than 3% after a record rally, falling to $61.7 an ounce from an all-time high of $64.64 earlier in the session.

In the international gold market, gold was down 0.1% at $4,280.69 an ounce, while U.S. gold futures were largely unchanged at $4,312.90. The slight retreat was attributed to profit-taking and investor caution ahead of major US economic data releases scheduled for next week.

Adnan Agar, director of Interactive Commodities, said global gold prices showed intraday volatility. “The high was $4,353 and the market later was around $4,295 after opening at $4,270. The market rallied and then fell slightly,” he noted.

Agar expects next week’s US employment and inflation data to be decisive for gold’s direction. “If the data supports gold, it could break the all-time high around $4,388,” he said, adding that silver’s record highs could signal further upside potential for gold.