The State Bank of Pakistan (SBP) on Thursday moped up excess liquidity, but the market remained liquid, said market punters. The State Bank raised Rs 39.6 billion through Open Market Operation (OMO) at 3.95 percent per annum. The money was picked up for two weeks. Market punters said that before the OMO, the overnight rates were moving around 0.5 percent, but it moved up to 2.5 percent just after the OMO. However, the overnight rate fell again, and most of the trade after OMO was made at 1 percent. Punters said the market was still liquid and the situation may persist till Monday next.

The SBP raised Rs 62.346 billion through auction of three-month and 12-month treasury bills (T-bills) on Wednesday, but the inflows were much more than the amount, which kept the market liquid and the SBP had to enter for OMO.

Copyright Business Recorder, 2005