SBP records Rs161.5b money market placements

Musharka accounts for over Rs125b in Islamic financing transactions

KARACHI:

The State Bank of Pakistan (SBP) has reported strong activity in the money market, with total placements reaching Rs161.53 billion across Islamic and conventional banking segments, according to data released by the central bank's Domestic Markets and Monetary Management Department.

The report, titled Money Market Placements in Islamic Modes, showed that transactions among Islamic banks, Islamic branches of conventional banks, conventional banks and non-bank financial institutions remained active on June 18.

Among Islamic banks and Islamic branches of conventional banks, all transactions were conducted through Musharka arrangements. Overnight placements amounted to Rs28.2 billion, carrying expected returns ranging from 11.00% to 11.50%, with a weighted average of 11.37%.

One-week Musharka transactions stood at Rs5.0 billion at 11.50%, while two-week placements reached Rs23.4 billion, yielding between 11.25% and 11.55%, with a weighted average of 11.36%. Three-week Musharka transactions totalled Rs4.3 billion at 11.50%. Overall, the segment recorded a traded volume of Rs60.9 billion.

No transactions were recorded between Islamic banks and Islamic branches of conventional banks with conventional banks, with both face amount and realised amount reported at zero.

Meanwhile, activity between conventional banks and Islamic banks and Islamic branches of conventional banks remained substantial. Mudaraba placements of Rs3.7 billion were executed overnight at 11.50%. Overnight Musharka transactions reached Rs61.8 billion, generating expected returns between 11.70% and 12.35%, with a weighted average of 12.10%. Secured Musharka placements totalled Rs12.0 billion at 12.00%, bringing the segment's overall volume to Rs77.5 billion.

The report also highlighted transactions between banks and non-banks, and among non-banks. One-week Mudaraba placements amounted to Rs5.0 billion at 11.30%, while two-week Musharka transactions stood at Rs600 million at 11.20%. Three-month unsecured Bai Muajjal deals reached Rs840.6 million at 11.55%

Additionally, one-week Musharka placements of Rs15.7 billion were conducted at returns ranging from 11.10% to 11.25%, with a weighted average of 11.11%. Overnight Musharka transactions worth Rs950 million were executed at rates between 10.75% and 11.00%, averaging 10.91%.

According to the SBP data, the aggregate face amount traded stood at Rs161.53 billion, reflecting continued liquidity management activity across Pakistan's Islamic and conventional financial sectors. The report noted that transactions with the SBP were not included in the figures.