Section 18: Open market and credit operations

2[18. open market and credit operations.⸺3[(l) The Bank may operate in the financial markets by⸺ (a) buying and selling outright (spot or forward) and conducting repurchase agreements of Government securities purchased in the secondary market; (b) swap or lending operations in foreign currencies; (c) lending or borrowing claims and marketable instruments and precious metals; (d) conducting, without prejudices to section 17G, credit operations with banks operating in Pakistan, with lending based on adequate collateral; and (e) other means as may be deemed expedient for the conduct of open market operations: Provided that the existing Government securities purchased on the primary market and in the books of the Bank on commencement of the State Bank of Pakistan (Amendment) Act, 2021, may be sold or used for repurchase agreements for the purpose of open market operations.] (2) The Central 4[Monetary Policy Committee] shall determine the types of instruments and activities and other operational methods of monetary control including Shariah based instruments to be used for open market and credit operations and it shall announce the conditions under which the Bank stands ready to either into such transactions. (3) For the purpose of regulating the monetary and credit system the Bank may issue certificates of deposit and new instruments including those that are Shariah-complaint.]

Effective date: 1956-04-18

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