KARACHI, Feb 7: The State Bank on Tuesday injected over Rs13 billion into the inter-bank market which witnessed highest possible overnight rates but no bank approached the discount window of the SBP.

As part of its monetary management, the SBP conducted an open market operation in the wake of shortage of liquidity and injected Rs13.650 billion.

Dealers said that the market was trading at an overnight rate of 8.9 per cent before the OMO. They said the rate fluctuated and slipped at 8 to 8.2 per cent.

“But the closing rate again went up to touch the highest 8.9 per cent,” said a dealer. The SBP has been conducting OMOs frequently for last six months and managing the liquidity position through this tool.

The SBP does not encourage banks to look at the discount window for liquidity which provides money for three days at the rate of 9 per cent. The central bank was keeping the overnight rate at the highest level as it used to suck up excess liquidity from the market before it could bring down the money rates.

Bankers said that the market might have to live with the high money rates as no inflows were scheduled for next couple of weeks.