Our Mission:

Effective management and policy formulation of foreign exchange markets and money markets in accordance with the objectives of Monetary Policy.

Introduction:

Domestic Markets and Monetary Management Department (DMMD) was created in September 2006, as a result of a comprehensive restructuring within State Bank of Pakistan, with the objective of transforming the central bank into a dynamic institution more responsive to the growing sophistication in financial markets. DMMD is an off-shoot of the previous Exchange and Debt Management Department (EDMD), which was established in February 2000 by merging the former Securities Department and the Foreign Exchange Dealing Room.

In April 2011, the Financial Markets Strategy & Conduct Department (FSCD) was merged in DMMD. Similarly, all policy related work pertaining to Cash Reserve Requirements (CRR) and Statutory Liquidity Requirements (SLR) and functions pertaining to Financial Derivatives Business Regulations, previously performed by Banking Surveillance Department (BSD), have been transferred to DMMD.

Departmental Goals:

The primary goal of Domestic Markets and Monetary Management Department is to implement the Monetary Policy of the State Bank of Pakistan by using the available tools in both the money and foreign exchange markets. DMMD initiates policy driven actions in the domestic financial markets for effective market and liquidity management.

Departmental Objectives

	Monitoring of money and FX market activities
	Conducting monetary and liquidity management operations
	Announcing quarterly auction calendar for MTB, PIB & Ijara Sukuk on behalf of government
	Conducting auctions for raising short term and long‐term domestic debt for the government
	Providing and mopping up funds from the financial institutions under the corridor facilities
	Conducting FX operations in the domestic FX market
	Monitoring transactional activities of banks’ treasuries to ensure compliance to SBP regulations
	FX cash flow management
	Analysis and reporting of FX reserves
	Managing external debt repayments
	Formulating policies regarding PDs, market product regulations, FEEL and CRR/SLR
	Reviewing & formulating derivative related policies/regulations
	Coordinating with various bodies/institutions related to domestic financial markets issues
	Ensuring policy compliance of government foreign currency certificates issued in the domestic market
	Managing database pertaining to domestic financial markets, domestic debt, etc.
	Analyzing market trends and developments
	Managing import & export of foreign currency notes keeping in view the costs and requirements of banks
	Responding to various queries and references

Department Structure:

DMMD is comprised of the following five divisions:

1. Markets & Monetary Management Division (MMMD)

This Division consists of three Units:

A. Money Market & Monetary Management Unit:

Goals & Objectives:

	Liquidity management & implementation of Monetary Policy
	Maintenance of the overnight repo rate with interest rate corridor as announced in the MPS by using the available tools:
	Open Market Operations Ceiling/Floor Rate
	Forecasting of daily cash flows in the interbank market for the next two weeks in order for effective liquidity management in accordance with Monetary Policy stance
	Monitoring of secondary market trading in government securities through Bloomberg EBND platform
	Monitoring of various interest rate curves of the market for gauging expectation and market behavior
	Conducting auctions of Treasury Bills, Pakistan Investment Bonds, Ijara Sukuk on behalf of GoP

B. Domestic Foreign Exchange Unit:

Goals & Objectives:

	Oversight of the FX market and execution of SBP FX market activity in accordance with exchange rate and Monetary Policy objectives
	Cash flow management of foreign exchange reserves
	Provide input for FX market regulations and policy formulation and offering comments on issues related to interpretation of FX market regulations

C. FX Reserve Analysis & Reporting & External Debt Repayment Unit:

Goals & Objectives:

	Compile and issue daily FX Reserves
	Prepare FX reserves / external debt related reports for various stakeholders
	Respond queries from IMF related to FX reserves and external debts
	Management and payment of all external debt Liabilities on behalf of GOP
	Coordination with Ministry of Finance and EAD for the management of external debt and FX reserve related issues
	Analysis of term and conditions of various FCY financing facilities (including issuance of sovereign bonds in international market) under consideration of GOP and feedback to MoF
	Responding to National Assembly/Senate questions

2. Market Surveillance & Compliance Division (MSCD)

This Division consists of three Units:

A. FX & Derivative Reporting System Unit:

Goals & Objectives:

	Surveillance and monitoring of all the derivatives and foreign exchange transactions in the interbank market and analysis of the related trends
	Ensure compliance to the regulatory/statutory requirements of SBP

B. Money Market Reporting System & USD Bonds Policy Compliance Unit:

Goals & Objectives:

	Monitoring all transactional activities of banks’ treasuries in money & bonds markets to gauge liquidity position and rates/volumes trends on daily basis
	To handle cases of USD bonds by ensuring policy compliance

C. Foreign Currency Notes Management, and Treasury Inspection & Enforcement Unit:

Goals & Objectives:

	To handle all policy & operational issues relating to currencies deposited by banks & the issues pertaining to export/import of FCY notes through vendors
	Keep watch on exchange rate differential between interbank rate & Kerb market rate and to arrange market intervention as and when decided by the management
	To ensure compliance of BID observations/comments raised in BID inspection reports related to treasury operations of commercial banks & to keep the higher management informed about the issues pertaining to these inspection reports

3. Market Policy & Regulation Division (MPRD)

This Division consists of three Units:

A. Fixed Income & FX Markets Regulations Unit:

Goals & Objectives:

	Review & formulate market related policies/regulations vis-a-vis;
	CRR/SLR Primary Dealer System for government securities Foreign exchange exposure limits Market product regulations
	Coordination with relevant market associations, committees & players e.g. FMAP, PBA sub-committee on Treasury & Capital Markets etc.

B. Derivative Markets Regulations Unit:

Goals & Objectives:

	Review & formulate derivative related policies/regulations
	ADD/NMI Licensing
	Processing of derivative transaction requests received from commercial banks at Derivative Approval and Review Team (DART) Secretariat

C. ACU Coordination:

This Unit is responsible for informing/facilitating/coordinating with Asian Clearing Union (ACU) on behalf of SBP.

4. Market Research & Data Management Division (MRDM)

The Division consists of three Units:

A. Market Analysis Unit:

Goals & Objectives:

	Preparation of analytical reports on the behavior of interest rate, exchange rate, and system liquidity
	Provide market insight/reaction about the key events, policy actions
	To contribute to the SBP publications/reports

B. Data Management Unit:

Goals & Objectives:

	Management of the data base of domestic public debt
	Disseminate data/information about Domestic Public Debt to internal and external stakeholders

C. New Products Research & Development Unit:

Goals & Objectives:

	To facilitate/coordination with key stakeholders for the development of financial markets & new instruments
	To respond to the references/queries received from internal and external stakeholders

5. Planning, Audit & Administration Division (PAAD)

Goals & Objectives:

	To provide a formal/dedicated support structure to efficiently manage all administrative and management responsibilities of the department
	Development of annual budget and business plan of the department, audit & compliance and compliance of strategic initiatives
	Training and development opportunities for the department officers and staff, and BCP coordination