KARACHI, Nov 16: The State Bank on Wednesday picked up Rs4.5 billion from the banking system through the Open Market Operation, curtailing chances for the money market to remain easy.

The money market was showing the presence of some liquidity in the market and the overnight rate dropped to seven and 7.5 per cent from the earlier 8.9 per cent.

The SBP’s intervention with the three-day Repo, which resulted in an outflow of liquidity from the system, again tightened market rates. The SBP picked up the money at eight per cent per annum.

After more than a couple of months, the money market started to ease off and the rates were coming down. During the last two months, the SBP injected liquidity on several occasions to cool down the heated rates.

Since first week of October, the SBP has injected over Rs90 billion into the system to provide liquidity, besides regular use of discount windows by the banks.

Bankers said the liquidity shortage would again prevail in the coming sessions as the demand was still high.