SBP injects Rs12.25tr via OMOs after rate cut

Gold dips in Pakistan as stronger dollar, US yields weigh; rupee posts marginal gain

KARACHI:

The State Bank of Pakistan (SBP) on Friday injected more than Rs12.25 trillion into the banking system through conventional and Shariah-compliant open market operations (OMOs) to manage short-term liquidity conditions.

According to the central bank, SBP conducted a conventional reverse repo OMO on December 19, 2025, accepting Rs12.35 trillion against total bids of Rs12.62 trillion for seven-day and 14-day tenors. The accepted rate of return for both tenors stood at 10.51% per annum, reflecting easing money market conditions following the recent policy rate cut.

Under the seven-day tenor, SBP accepted Rs1.27 trillion, while the bulk of liquidity — Rs11.08 trillion — was injected through the 14-day tenor, indicating banks' preference for relatively longer-duration funding.

Separately, the central bank also carried out Shariah-compliant Mudarabah-based OMOs on the same day, injecting Rs81 billion into Islamic banks. SBP accepted the entire offered amount for both seven-day and 14-day tenors at rates of return of 10.57% and 10.56%, respectively.

Meanwhile, gold prices in Pakistan edged lower on Friday, tracking subdued movement in the international bullion market, where a firmer US dollar and rising Treasury yields dampened demand for the non-yielding metal. Despite the decline, prices remained on course for a weekly gain.

In the local market, the price of gold per tola fell by Rs900 to settle at Rs454,862, according to rates issued by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). Similarly, the price of 10-gram gold declined by Rs772 to Rs389,970. On Thursday, gold prices had surged, with the per tola rate increasing by Rs2,200 to Rs455,762.

Silver prices also registered a decline, shedding Rs52 to close at Rs6,848 per tola.

In the international market, spot gold rose marginally by 0.1% to $4,338.37 per ounce as of 1505 GMT, but was still set to post a weekly gain of around 0.9%. US gold futures were also up 0.1% at $4,370.10 per ounce, according to Reuters.

For next year, various research houses are forecasting gold prices in the range of $4,800 to $5,100.

Commenting on market dynamics, Adnan Agar, Director at Interactive Commodities, said differing price targets among analysts and brokers do not necessarily indicate contradictions but rather reflect varying financial models and assumptions. He noted that, similar to equities, commodities markets often see a wide range of forecasts, with investor sentiment ultimately guided by perceived upside or downside potential.

Agar added that despite expectations of relatively lower targets next year due to elevated current prices, gold remains at historically high levels. He pointed out that thin trading during the year-end holiday period could keep markets subdued but may also trigger unexpected upside movements. Given current trends, he said gold could potentially test new all-time highs in the coming weeks, possibly around late December or early January, as global markets enter a quieter phase.

Meanwhile, the Pakistani rupee posted a marginal gain against the US dollar in the inter-bank market on Friday, closing at 280.25 after appreciating by Re0.01. The local currency had ended the previous session at 280.26.