The State Bank of Pakistan (SBP) on Monday conducted the second Open Market Operation (OMO) for outright purchase (Bai Muajjal) of Government of Pakistan Ijara Sukuk-9 (GIS) and accepted bids amounting to Rs 39 billion. First outright purchase of GIS was held last Thursday, in which some Rs 6.175 billion worth bids were accepted.
The SBP on October 27 invited bids for outright purchase of GIS and received a very aggressive response from Islamic Banking Industry (IBI) as they submitted 19 bids amounting to Rs 39.4 billion for 12-month period ranging from Rs 113.3959 to Rs 113.6023. No offer was received for 6-month. The SBP accepted all offers amounting to Rs 39.4 billion at a deferred price of Rs 113.6023.
As per transaction modalities, all Islamic banks and conventional banks having Islamic branches were eligible to participate in the OMO. With this auction, IBI has successfully parked a huge amount for one year. In the first outright purchase, the SBP accepted offers amounting to Rs 6.175 billion. This included all 6-month bids at a deferred price of Rs 108.3856. There were some four bids for 12-month period amounting to Rs 3.175 billion at a deferred price of Rs 113.5572.
Recently, the central bank had announced that it will initiate outright trade of GIS through OMOs to facilitate IBI for liquidity management as for the last few years, the Islamic banking industry is facing a severe challenge of liquidity management. After successful launching of the OMO for GIS, IBI was expecting another purchase this week and as per expectations, the SBP on Monday conducted the second OMO.