DFIs have been allowed to participate in open market operations by Pakistan’s State Bank of Pakistan on Tuesday (OMOs). This permission by the central bank is expected to help DFIs in managing their liquidity. Development Finance Institutions (DFIs) will now be able to participate in OMOs, citing DMMD Circular No. 12 of 2017, which allows all scheduled banks and main dealers to participate in OMOs, to “enhance their liquidity management”. Therefore, DFIs would be entitled to participate in OMOs in accordance with the OMO instructions and procedure specified in the master circular. On the other hand, according to the central bank, all other directions on the matter remain intact. To make things easier for the participating institutions, the central bank issued a master circular on “open market operations” in 2017. If the Reuters Dealing Terminal is unavailable for whatever reason, all eligible players must submit their bids by fax or electronic means, as specified in the master circular. The SBP will not accept any bids via telephone. SBP uses open market operations (OMOs) to maintain a close match between the overnight repo rate and the SBP target “policy rate” defined under the updated Interest Rate Corridor Framework. OMOs are open to all scheduled banks and primary dealers, however, the SBP may conduct special OMOs in which only Primary Dealers are eligible. As per the master circular, OMO-eligible securities include Government of Pakistan Market Treasury Bills, Pakistan Investment Bonds, and any other instrument notified by the SBP for this purpose. Eligible participants cannot employ securities categorized as Held to Maturity in OMOs.