The State Bank on Wednesday injected Rs 14 billion to fill the liquidity-dry money market and provide relief for at least one week. The injection of liquidity into the market, which experienced a fairly long dry spell, got immediate response as the rates suddenly dropped. The State Bank conducted Open Market Operation and bought treasury bills to inject the liquidity.
The amount was taken at the rate of 4.20 percent per annum and was raised for one week.
The SBP had received offers worth Rs 16 billion but accepted only Rs 14 billion.
Money dealers said that inflow of Rs 14 billion immediately changed the situation and the overnight rate, which had been experiencing a rate of over 7 percent per annum for a couple of weeks, suddenly dropped to 1.5 percent.
They also observed that heavy withdrawals for Eid shopping was another reason for cash crisis in the money market.
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