SBP injects Rs205 billion in two weeks | Pakistan Today

SBP injects Rs205 billion in two weeks

The central bank on Friday injected Rs115 billion more in the banking system where pre-Ramadan cash withdrawals is said to have created a liquidity crunch. Last week on July 22 the State Bank injected Rs90 billion in the money market to bridge the gap between demand and supply created by depositors who wanted to avoid the payment of Zakat which is deducted by the banks during the holy month of Ramadan if a formal undertaking is not submitted by the former. Rate of return for last week’s injection was 13.45 per cent.
The new injection takes the amount injected by the regulator in the system to Rs205 billion during last two weeks. The SBP, in its Friday’s reverse repo open market operation in the Government of Pakistan Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs), injected some Rs115 billion into the banking system. According to the central bank offers from primary dealers for Friday’s auction amounted to Rs140.750 billion for the 4-days reverse repo. Accepted bids amounted to Rs115 billion at 13.59 per cent rate of return. The current rate of return witnessed an increase of 0.14 basis points when compared with 13.45 per cent of the previous auction.
“Total amount offered at 13.59 per cent was Rs16 billion out of which SBP accepted Rs9.9 billion on pro-rata basis,” the bank said. Liquidity crisis, according to analysts is mainly because of the fact that no money through public savings and other means is reaching the currency market. On the other hand money in circulation has already been blocked by Non-Performing Loans (NPLs) and massive government borrowings that aggregated to Rs735 billion during last fiscal year, 2010-11.

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