The State Bank of Pakistan (SBP) has injected a monumental Rs13.06 trillion into the domestic banking system through a combined reverse repo and Shariah-compliant Modarabah-based Open Market Operation (OMO) on October 23, 2026. The aggressive capital deployment aims to stabilize systemic liquidity shortfalls across both conventional and Islamic financial institutions.
The conventional reverse repo injection accounted for the vast majority of the liquidity provision, totaling Rs12.60 trillion. Operating through “Injections,” the SBP lends capital directly to commercial banks and Primary Dealers (PDs) against eligible collateral, which strictly encompasses marketable government securities such as Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs).
“Open Market Operation is a tool used by SBP to inject or mop-up funds, based on the liquidity requirements, from the banking system via the purchase or sale of eligible securities.”
For the 7-day tenor, the SBP received and fully accepted Rs276 billion across 5 quotes at a flat accepted rate of 11.55%. However, the 14-day tenor witnessed overwhelming market demand. The central bank accepted Rs12.32 trillion from an offered Rs12.80 trillion across 32 of the 33 submitted quotes at a cut-off rate of 11.53%. Notably, the SBP accepted Rs3,706.85 billion out of Rs4,178.5 billion offered at 11.53% on a strict pro-rata basis.
Conventional Reverse Repo (Injection) Data
| Tenor | Type | Offered (Rs mn) | Accepted (Rs mn) | Rate High-Low (%) | Accepted (%) | Quotes Offered | Quotes Accepted |
| 7D | Reverse Repo (Injection) | 276,000 | 276,000 | 11.56 – 11.55 | 11.55 | 5 | 5 |
| 14D | Reverse Repo (Injection) | 12,804,650 | 12,325,000 | 11.58 – 11.52 | 11.53* | 33 | 32 |
| Total | 12,601,000 |
*(Note: SBP accepted Rs3,706.85bn out of Rs4,178.5bn offered at 11.53% on a pro-rata basis.)
Parallel to conventional lending, the SBP channeled Rs460.4 billion into the Islamic banking sector via a Shariah-compliant Modarabah-based OMO. Dedicated Islamic banks and specialized Islamic windows of conventional banks act as the exclusive eligible counterparties for these transactions.
Also Read: State Bank Of Pakistan Expected To Raise Policy Rate By 50 Basis Points To 12%
The 7-day Modarabah injection absorbed Rs32 billion at a rate of 11.56%, while the 14-day contract supplied the bulk of the Islamic liquidity, accepting Rs428.4 billion at a rate of 11.55%. Both Shariah-compliant tenors witnessed a 100% acceptance rate for all submitted market quotes.
Shariah-Compliant Modarabah (Injection) Data
| Tenor | Type | Offered (Rs mn) | Accepted (Rs mn) | Rate High-Low (%) | Accepted (%) | Quotes Offered | Quotes Accepted |
| 7D | Modarabah (Injection) | 32,000 | 32,000 | 11.56 – 11.56 | 11.56 | 3 | 3 |
| 14D | Modarabah (Injection) | 428,400 | 428,400 | 11.60 – 11.55 | 11.55 | 8 | 8 |
| Total | 460,400 |
To effectively maintain macroeconomic equilibrium, the central bank utilizes alternating mechanisms depending on daily liquidity levels. Conversely, when conducting a “Mop-up,” the SBP sells MTBs on a repo or outright basis to strip excess capital from the system. For Islamic institutions, “Bai-Muajjal” serves as a parallel Shariah-compliant liquidity management tool backed by Government of Pakistan (GOP) Ijara Sukuk.