KARACHI, April 21: The State Bank on Thursday sucked in Rs5.5 billion from the interbank market in the third-in-a-row open market operation it conducted to reduce liquidity levels. The central bank said it mopped up Rs5.5 billion for one week at 5.45 per cent through repo sale of treasury bills.
On Tuesday and Wednesday also, it had mopped up Rs10.4 billion and Rs6.4 billion respectively.
Bankers said that overnight lending rates ended below half a per cent, despite the outflow of Rs5.5 billion from the system. They said the market was still long by a couple of billions of rupees.
After increasing its discount rate by one-and-a-half percentage points to 9 per cent on April 11, the central bank has become a bit more aggressive in draining out excess liquidity from the banking system to let the market feel the fuller impact of tightening of interest rates.
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