SBP injects over Rs2tr via OMOs

Gold price rises Rs3,000 per tola to Rs497,662 as rupee inches up against dollar

KARACHI:

The State Bank of Pakistan (SBP) injected more than Rs2 trillion into the banking system on Friday through two Open Market Operations (OMOs), signalling continued liquidity support for the government's fiscal needs.

According to the central bank, in the conventional segment, the SBP conducted a reverse repo purchase and accepted all 17 bids across two tenors. It injected Rs127,500 million for seven days at a rate of 10.53%, and Rs1,500,800 million for 14 days at 10.51%, taking the total conventional liquidity injection to Rs1,577,781 million.

Simultaneously, the central bank carried out Mudarabah-based OMOs to facilitate Islamic banking. It accepted the entire Rs121,000 million offered for the seven-day tenor at 10.57%. However, in the 14-day tenor, the SBP adopted a more selective approach, accepting Rs325,550 million at 10.55%. This included a pro-rata acceptance of Rs54,050 million against bids totalling Rs115,000 million at the 10.55% rate, indicating relatively higher participation at that level. The total realised value for Shariah-compliant injections stood at Rs445,550 million.

The Pakistani rupee inched up by Rs0.01 to close at 279.01 against the US dollar in the interbank market on Friday, as the greenback headed for its biggest weekly drop since January amid optimism over a sustained Gulf ceasefire and resumption of oil shipments.

Meanwhile, gold prices in Pakistan rose on Thursday, tracking gains in the international market as bullion edged higher amid a softer US dollar following a tentative US-Iran truce, while investors remained cautious about its sustainability and implications for global interest rates.

In the domestic market, the price of gold per tola increased by Rs3,000 to settle at Rs497,662, according to data released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). Similarly, the rate for 10 grams of gold climbed by Rs2,572 to Rs426,664. The latest increase follows a sharp decline a day earlier, when gold prices had dropped by Rs9,500 per tola to close at Rs494,662, highlighting ongoing volatility in the bullion market. Silver prices also witnessed an upward trend, gaining Rs130 to reach Rs8,014 per tola in the local market.

Globally, spot gold rose 0.4% to $4,780.22 per ounce by midday trading, and is up more than 2% so far this week, putting it on track for another weekly gain. However, US gold futures slipped 0.3% to $4,805.40 per ounce, reflecting some profit-taking and cautious sentiment among traders.

Market participants attributed the recent gains to a weakening US dollar and persistent geopolitical uncertainty, particularly surrounding the fragile truce between the United States and Iran. Analysts say the evolving situation continues to support gold's safe-haven appeal.

"Gold buyers are carefully reclaiming the narrative this week with higher lows every day, helped by the tentative ceasefire," said independent metals trader Tai Wong. He noted that the $5,000 level remains a critical psychological barrier, adding that a sustained break above it could reignite the broader bull run.

Adnan Agar, Director at Interactive Commodities, said the market remained largely subdued as investors awaited clarity on Iran-US negotiations. "If talks succeed, gold can move further upward. Even if they fail, any downside may be limited and temporary, as the safe-haven factor will continue to support prices," he said, adding that the overall outlook remains tilted to the upside.

Meanwhile, physical gold markets in Asia showed mixed trends. Indian dealers charged premiums of up to $9 per ounce despite subdued festive demand, while Chinese premiums narrowed to $3-$5 per ounce amid weak retail buying.