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SBP injects Rs 20.2b in banking system

Staff Report

KARACHI: The State Bank of Pakistan (SBP) Friday injected Rs 20.2 billion through a reverse repurchase agreement to ease the liquidity crisis in the money market owing to Eidul Azha.

The central bank said it bought the bills at an annual rate of 8.05 percent. The banks offered Rs 22.20 billion for the reverse repo. Dealers said the overnight rate was trading around 8 percent, down from 8.90 percent Monday. The financial markets were closed on last Tuesday and Thursday because of the Eidul Azha.

“We may not see any significant decline in the rate as banks also have to cover their weekly cash reserve positions today,” said a dealer. Market liquidity tightened after the heavy withdrawal of funds from banks by the public ahead of the Eidul Azha holiday.

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