SBP Injects Rs1.72 Trillion to Ease Liquidity, Gold Prices Surge Amid Global Tensions
KARACHI: In a significant move to manage liquidity in the financial system, the State Bank of Pakistan (SBP) on Friday injected a total of Rs1.72 trillion through simultaneous conventional and Shariah-compliant open market operations (OMOs). The liquidity support comes on the heels of a massive government borrowing round earlier in the week.
Dual OMOs Ease Market Pressure
The SBP’s latest injection follows the government’s borrowing of Rs1.62 trillion on Wednesday via Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PFLs). With direct central bank borrowing restricted under the International Monetary Fund (IMF) program, the government continues to rely on private sector funding through security auctions.
According to SBP data:
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Rs1.48 trillion was accepted under conventional reverse repo operations with a realized value of Rs1.43 trillion.
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This included Rs154.25 billion for 7 days at 11.09% and Rs1.32 trillion for 14 days at 11.07%.
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The Shariah-compliant Mudarabah-based OMO saw Rs243 billion injected.
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Rs40 billion for 7 days at 11.13%
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Rs203 billion for 14 days at 11.12%
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The robust demand for 14-day liquidity in both OMOs signals banks’ expectations of further monetary easing, especially after SBP’s recent policy rate cut amid a declining inflation trend.
Currency Update: Rupee Inches Higher Against US Dollar
The Pakistani rupee registered a slight gain against the US dollar in the inter-bank market. The local currency appreciated by 0.04%, closing at Rs284.46, up from Rs284.56 a day earlier. This marks a modest but positive shift in the exchange rate, reflecting improved market sentiment.
Gold Prices Skyrocket as Global Demand Surges
On the commodities front, gold prices in Pakistan surged sharply on Friday, mirroring gains in the international market. The yellow metal rallied as investors sought safe-haven assets after former U.S. President Donald Trump announced new trade tariffs, stoking fears of a renewed global trade conflict.
According to the All Pakistan Sarafa Gems and Jewellers Association:
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Gold price per tola rose by Rs2,300, reaching Rs357,000
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Price for 10 grams climbed by Rs1,971, settling at Rs306,069
This follows Thursday’s increase of Rs3,200 per tola, when gold hit Rs354,700.
Global Gold Outlook
Internationally, spot gold surged by 1.2%, hitting $3,363.46 per ounce, its highest level since June 24, while U.S. gold futures rose 1.6% to $3,377.80, according to Reuters.
Adnan Agar, Director at Interactive Commodities, noted:
“Gold touched a low of $3,322 and a high of $3,368 today. Renewed tariff threats from Trump have triggered another wave of gold buying.”
He added that unless there’s a breakthrough in trade talks before August 1, gold is likely to trade in the range of $3,270–$3,420. If tariffs persist, a further rally is expected—though Trump’s pattern of last-minute negotiations could potentially limit the metal’s upside.
Conclusion:
With the SBP stepping up liquidity injections and global markets reacting to renewed geopolitical tensions, Pakistan’s financial landscape remains dynamic. Investors, banks, and businesses alike are closely monitoring these developments as they shape monetary policy, currency trends, and commodity prices heading into Q3 2025.
