State Bank of Pakistan Activates Reverse Repo Facility Amid Market Movements

KARACHI: The State Bank of Pakistan (SBP) has reported the activation of its overnight reverse repo facility, marking a significant financial maneuver in the country’s monetary management. On November 14, 2025, the central bank facilitated one financial institution with an injection of Rs. 105,400 million through this mechanism.

The SBP Overnight Repo and Reverse Repo facilities serve as crucial tools in managing liquidity within the domestic markets. While the repo facility, which acts as a floor by providing liquidity to institutions, saw no activity, the reverse repo facility was utilized. This operation, often referred to as the ceiling, involves the central bank absorbing liquidity from the market.

The activation of the reverse repo facility reflects the SBP’s ongoing efforts to regulate the money supply and interest rates, maintaining economic stability. By absorbing excess liquidity, the central bank can address inflationary pressures and influence short-term interest rates.

This measure comes amid fluctuating market conditions, where financial institutions seek the central bank’s support to balance their portfolios. The SBP’s intervention underscores its role in ensuring the smooth functioning of the financial system.

The State Bank’s monetary tools are pivotal in steering the economy towards its financial objectives. The recent transaction highlights the dynamic nature of monetary policy management in response to market demands.