KARACHI, Nov 13: The State Bank on Thursday again injected Rs13.75 billion into the inter-bank money market to ease off the temporary liquidity crunch the banks are facing due to withdrawal of money by people for Eid shopping.

The central bank made this injection through two-week reverse repo of treasury bills at two per cent. This means the SBP resell Rs13.75 billion worth of these T-bills after two weeks, thus sucking in this much amount from the money market.

Senior bankers said that the open market operation called by the SBP for injecting liquidity into the banking system attracted total offers worth Rs23.35 billion — Rs13.75 billion in two weeks and Rs9.6 billion in one-week. But the central bank refused all offers for one week and accepted Rs13.75 billion offers for two weeks.

This is the third injection of fund into the money market by the SBP so far during Ramazan. Earlier on November 6 and on November 10, the central bank had injected Rs7.35 billion and Rs11.3 billion, respectively, into the banking system.

The reason why the SBP had to make a third injection was that out of the first injection of Rs7.35 billion made on November 6, Rs5.85 billion was pumped in for one week — so the amount eventually flew out of the system on Thursday (November 13). The SBP pumped in Rs13.75 billion into the system on Thursday keeping this in mind. This not only offset the outflow of Rs5.85 billion from the system, but also provided additional liquidity.