Latest news with #Rs1.413
Express Tribune
5 days ago
- Business
- Express Tribune
State Bank injects Rs1.7tr via dual OMOs
Listen to article The State Bank of Pakistan (SBP) on Friday injected a total of Rs1.72 trillion into the banking system through simultaneous conventional and Shariah-compliant open market operations (OMOs), aimed at addressing liquidity needs. Earlier on Wednesday, the government had borrowed Rs1.62 trillion through auctions of securities, with a substantial proportion of Rs1.413 trillion being raised from the Market Treasury Bills (MTBs) and Rs208.42 billion from the 10-year Pakistan Investment Bonds Floating Rate (PFL). The government is compelled to borrow from the private sector amid limits from the International Monetary Fund (IMF) on borrowing directly from the central bank. Therefore, the central bank has to go through this cycle of injecting money through OMOs and then borrowing back from the private sector through securities to bridge the fiscal deficit of the government. According to official data, the SBP accepted bids worth Rs1.48 trillion under its conventional reverse repo operation, with a realised value of Rs1.43 trillion. The OMO included injections of Rs154.25 billion for seven-day tenor at a rate of return of 11.09% and Rs1.32 trillion for 14-day tenor at 11.07%, with 24 bids accepted out of 27 received. In parallel, the central bank conducted a Mudarabah-based Shariah-compliant OMO, where it injected an additional Rs243 billion, with a realised value of Rs244.9 billion. The Islamic OMO consisted of Rs40 billion accepted for seven days at a rate of 11.13% and Rs203 billion for 14 days at 11.12%. All three bids received were accepted, reflecting growing market interest in Shariah-compliant instruments. The cumulative injection of liquidity comes at a time when the SBP has been easing monetary conditions, having recently cut the policy rate amid a downward trend in inflation. The strong demand for 14-day funds in both OMOs highlights banks' preference for locking in medium-term liquidity, possibly in anticipation of further monetary easing. Furthermore, the rupee posted a marginal gain against the US dollar on Friday, appreciating by 0.04% in the inter-bank market. By the end of trading, the rupee closed at 284.46, marking an improvement of 10 paisa compared to Thursday's closing rate of 284.56. Meanwhile, gold prices in Pakistan climbed sharply on Friday, tracking gains in the international market, where the yellow metal surged over 1% to a more than two-week high. The rally was driven by renewed safe-haven demand after President Donald Trump reignited trade tensions by announcing fresh tariffs, escalating fears of a global trade war. In the domestic market, the price of gold per tola rose Rs2,300 to settle at Rs357,000, according to data released by the All Pakistan Sarafa Gems and Jewellers Association. Similarly, the rate for 10 grams of gold increased Rs1,971 to Rs306,069. This follows Thursday's sharp uptick of Rs3,200 per tola, when gold closed at Rs354,700. Globally, spot gold was up 1.2% to $3,363.46 per ounce by 11:32 am EDT (1532 GMT), its highest since June 24. US gold futures gained 1.6% to $3,377.80, according to Reuters. Adnan Agar, Director at Interactive Commodities, explained the international trend, saying: "Gold touched a low of $3,322 and a high of $3,368 today (Friday) and is trading around $3,355. Renewed tariff threats from Trump have triggered another wave of buying in gold." He noted that unless a breakthrough occurs in trade negotiations after August 1, gold is expected to continue trading within a range of $3,270 to $3,420. "If tariffs persist beyond August, we could see further upside. Otherwise, history shows that Trump often backtracks or secures last-minute deals, which could cap gold's rise," Agar added.
Express Tribune
7 days ago
- Business
- Express Tribune
Govt raises Rs1.62 trillion via T-bill, bond auctions
Listen to article The State Bank of Pakistan (SBP) mobilised approximately Rs1.62 trillion through its latest auctions of government securities, of which a substantial proportion, Rs1.413 trillion, was raised from Market Treasury Bills (MTBs) and Rs208.42 billion from 10-year Pakistan Investment Bonds Floating Rate (PFL). The MTB auction reflected strong investor appetite across all four tenors. The SBP accepted bids worth Rs214.28 billion for one-month papers at a cut-off yield of 11.24%, Rs474.70 billion for three-month papers at 10.9977%, Rs180.52 billion for six-month bills at 10.8976% and Rs543.88 billion for 12-month bills at 10.80%. The highest allocation was seen in the 12-month tenor, indicating increasing investor interest in slightly longer-term instruments amid a downward yield trend. Non-competitive bids in the MTB auction totalled Rs379.78 billion, with a major share – Rs310.63 billion – going into the three-month tenor, further underscoring the market's preference for shorter durations. In the 10-year PFL auction, the SBP accepted competitive bids worth Rs202 billion and non-competitive bids of Rs6.42 billion, with the issue settling at a cut-off price of Rs94.5739. Although the total raised slightly missed the Rs1.7 trillion mark, analysts note that the dominance of MTBs and a flattening yield curve suggest growing interest in longer-tenor government securities. Market watchers await details of any additional auctions that could bridge the gap and complete the government's near-term borrowing target. Moreover, the Pakistani rupee experienced a slight depreciation against the US dollar in the inter-bank market, closing at Rs284.47 to a dollar, down 0.04% from the previous day's rate of Rs284.36. Gold drops Rs3,000/tola Local gold prices dropped on Wednesday, mirroring a decline in the international market where rates fell to their lowest level in over a week due to a stronger US dollar and ongoing trade negotiations involving the United States. According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold per tola fell Rs3,000 to settle at Rs351,500, while the rate for 10 grams dropped Rs2,572, closing at Rs301,354. This followed a rise on Tuesday when gold had gained Rs1,500 per tola to reach Rs354,500. Spot gold was down 0.1% at $3,297.19 per ounce, as of 9:23 am ET (1323 GMT), after hitting its lowest level since June 30 earlier, according to Reuters. US gold futures fell 0.3% to $3,306.10. The US dollar index hovered near a two-week high, making bullion less attractive for overseas buyers. The yield on benchmark 10-year US Treasury notes remained close to a three-week peak.
