SBP injects Rs14tr to bridge gaps
The State Bank of Pakistan (SBP) conducted one of the highest Open Market Operations (OMOs) on June 20, 2025, injecting liquidity worth a substantial Rs14.3 trillion into the banking system to meet temporary and structural liquidity requirements.
According to official data, the SBP accepted Rs13.93 trillion through a conventional reverse repo (injection) at a rate of return of 11.03% per annum across 36 quotes. Additionally, a Shariah-compliant Mudarabah-based OMO injection of Rs375 billion was executed at a return of 11.11% per annum with three accepted quotes.
Sana Tawfiq, Head of Research at Arif Habib Limited termed this "among the highest single-day OMOs by the central bank," attributing the surge to both temporary and permanent factors. She noted that currency in circulation typically rises ahead of Eid, creating a temporary liquidity gap.
On the structural side, debt repayments and a time lag between repayments and fresh inflows are elevating liquidity needs, she explained. She added that the government's fiscal deficit financing — constrained by International Monetary Fund (IMF) conditions that bar direct borrowing from the SBP — has further amplified OMO reliance, with banks channelling funds into government securities instead.
Market experts expect the liquidity injections to remain elevated in the near term until inflows match outflows and post-Eid cash demand normalises.
Furthermore, the Pakistani rupee extended the declining trend against the US dollar in the interbank market on Friday, slipping by 0.02%.
By the close of trading, the local currency settled at 283.70 against the greenback, down by six paisas from the previous day's closing rate of 283.64.
Globally, the US dollar was on track for its largest weekly gain in over a month, supported by safe-haven demand as investors remained cautious over escalating tensions in the Middle East and their potential impact on the global economy.
Meanwhile, gold prices in Pakistan fell on Friday in line with the international market, which remained steady but on track for a weekly loss as investors awaited clarity on the Israel-Iran conflict after US President Donald Trump delayed a decision on possible involvement.
According to data released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of 24-karat gold per tola dropped by Rs1,595 to settle at Rs357,000. Similarly, the rate for 10 grams of gold declined by Rs1,368 to Rs306,069.
Internationally, gold prices were steady on Friday and poised for a weekly loss after President Trump delayed a decision on entering the Israel-Iran conflict, according to Reuters. Spot gold was little changed at $3,369.63 an ounce, as of 1557 GMT.
Adnan Agar, Director of Interactive Commodities said gold prices remained range-bound on Friday, with the metal trading between $3,340 and $3,375 in the international market, as investors awaited clarity on geopolitical developments in the Middle East.
He told The Express Tribune that the market has been on a downward trend for the past five trading sessions, with a key support level identified at $3,320.
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