KARACHI: In a bid to overcome liquidity shortage in the country, the central bank has injected Rs133 billion cash in the banking system for a week against the cut-off yield of 6.53% through the Open Market Operation (OMO).
The State Bank of Pakistan (SBP) injected huge cash in the network second time two months and may further continue this practice in near future. In August, the central bank made a historical contribution in the system by injecting more than Rs1 trillion in four instalments.
The liquidity crisis witnessed after the boycott of banking transactions by the traders over the imposition of 0.3% withholding tax (WHT) on transaction of above Rs50,000.
The commercial banks recorded significant decline in their profits and revenues in the first half of 2015, subsequently paying huge amount on the account of taxes that also caused paucity in the banking system for meeting the seasonal demand hike.
The central bank data stated that deposits of the banking system dropped by Rs34.215 billion in July 2015, the first month in which WHT tax was imposed, after gradual growth in the banks’ deposits for seven consecutive months.
