Karachi July 5 2022: State Bank of Pakistan (SBP) inject an amount of PKR 1,186 billion through 73-day Open Market Operation instead of normal 2-7-day OMO for improving liquidity of the banking sector on 5th July 2022.
Market participants expect a greater interest rate hike from current 13.75% rate after the higher-than-expected inflation in June. However, this step will provide certainty to bonds market and bridge the gap created between banking sector deposits and government borrowing.
Pakistan Inflation measured by CPI inflation General, increased by 21.3% on year-on-year basis in June 2022 as compared to an increase of 13.8% in the previous month and 9.7% in June 2021. On month-on-month basis, inflation increased by 6.3% in June 2022 as compared to an increase of 0.4% in the previous month and decrease of (-) 0.3% in June 2021.
With this injection, SBP pumping of money reached PKR 5.14 trillion through OMO at rate ranging from 13.83% to 13.97%.
Deposits of the commercial increase by only one percent or PKR 179 billion in first five months of this calendar year.
