KARACHI, Nov 19: The State Bank on Tuesday mopped up part of the surplus liquidity from the banking system through one-week repo of treasury bills.

The SBP sucked in Rs13 billion through one-week repo with a number of banks at an open market operation at 2.95 per cent. This was the first OMO after the 1.5 per cent cut in the SBP discount rate announced on Saturday. Senior bankers said the OMO had attracted bids worth Rs27.35 billion but the central bank accepted Rs13 billion bids and rejected the rest.

The bankers said the SBP left the market surplus by at least Rs10bn to keep the banking system liquid during cotton financing season and ahead of Eid.

The banks that whose major bids for the T-bills were accepted included (i) National Bank (ii) Habib Bank (iii) United Bank (iv) Allied Bank and (v) Askari Bank.

Bankers said the even before the OMO the T-bills with one-week maturity were trading at 2.0-2.5 per cent. The rate came down to this level after the State Bank had lowered its discount rate from 9 to 7.5pc on Saturday.