SBP buys back Rs21.35b T-Bills from the banks

KARACHI: State Bank of Pakistan (SBP) bought back Rs21.35 billion of Treasury Bills at 12.30 percent interest under seven-day reverse repo contracts to inject liquidity into the tight money market. In the wake of the holy month of Ramazan and the approaching Eid-ul-Fitr, the depositors continued withdrawing money from the banks triggering a liquidity crunch, which prompted the Central Bank resorting to open market operation for buying back the T-Bills from the banks in a bid to inject liquidity into the banks. The banks offered T-Bills of Rs34.15 billion for sale, but the Central Bank viewing the needs of the banking system bought back Rs21.35 billion of T-Bills at 12.30 percent profit under seven-day reverse repo contracts.