Pakistan central bank adds 59B rupees in 14-day Islamic OMO at 11.13%

Pakistan central bank adds 59B rupees in 14-day Islamic OMO at 11.13%

ISLAMABAD, July 2, 2025: The State Bank of Pakistan (SBP) injected Rs 59 billion into the banking system through a 14-day Islamic Open Market Operation (OMO) at an interest rate of 11.13%, according to an official statement released on Friday [1]. This move is part of the central bank's ongoing efforts to support the growth of Islamic banking and align the country's financial system with Islamic principles.

The latest OMO operation is a significant step in the SBP's strategy to promote Islamic finance in Pakistan. As of March 2025, Islamic banking assets in Pakistan had reached Rs 11.5 trillion, representing 21.1% of the total banking sector assets [2]. The SBP's governor, Jameel Ahmad, has emphasized the importance of increasing the share of Islamic banking investments in the overall industry to facilitate the transition to a fully Shariah-compliant financial system.

The central bank has been actively working towards this goal by issuing sukuk Islamic bonds to replace interest-based treasury bills and investment bonds. However, the non-issuance of sukuk bonds has been identified as a major hurdle in promoting Islamic banking. Ahmad has called upon the banking industry, regulators, and the government to address these issues and issue more sukuk bonds to offer investors Shariah-compliant products.

The SBP's latest OMO operation is expected to further bolster investor confidence in the Islamic banking sector and contribute to the overall economic growth of Pakistan. As the country continues to move towards implementing a fully Shariah-compliant financial system, these initiatives are crucial in ensuring the sustainable development of Islamic finance in Pakistan.

References:
[1] https://www.facebook.com/groups/arynewspakistannews/posts/4154120814868313/
[2] https://www.arabnews.com/node/2601428/pakistan