Updated on July 12 - 18, 1999
The interbank market remained glued towards the lower end of the
spectrum. Overnight activity was restricted at the 1.00% level but levels rose upwards as
the week progressed. The auction settlement caused an outflow of Rs. 2.276 billion which
saw rates moving marginally. Trades were witnessed between 1.50% and 4.00% and some trades
were also conducted at 4.50%. It was on Saturday the first day of the reporting week that
rates shot up due to the outflow expected on Monday on account of the change in the
Statutory Reserve Requirements. Overnight trades were witnessed at 12.90% with large
amounts in overnight already trading on Friday evening. Market rates have already taken
shape for the heavy outflow expected on 12th and with the market already closing short on
Saturday the draining of liquidity on Monday is expected to further aggravate the
The term market was active the past week but amounts traded were
nominal . It was the one month tenor that moved upwards due to the hike in short term
rates. Bids and offers prevailed in the band of 7.75% and 8.25% earlier in the week but as
the weekend neared rates shot up with trades at 10.00% and soon amounts also being dealt
at 11.00% and some at 11.25% from spot as well as from the 12th of July. Three month
activity was also conducted as some borrowers hurriedly covered themselves between the
narrow band of 7.75% and 8.25% before offers moved upto 8.50% while the six month tenor
was rather quiet. Bids and offers were quoted in forward dates from the 15th and the 21st
at 8.50% and 8.75% but later level changed with bids at 8.70% and offers close to 9.00%.
Yet again SBP picked up only the target amount and after the seeing the bids pattern it
was obvious that SBP may only manage to get the amount against the one year T-Bill without
increasing rates drastically. A total amount of Rs. 12.476 billion was bids for the three
papers and SBP picked up the amount at a cut-off of 10.497% with the weighted average
working out to be 10.33%. The previous cutoff for the one year paper being 10.25%.
Long dated instruments failed to gain any major interest,
Federal Investment Bond
This Week 1 Wk. Ago 1 Yr. Ago
Bid Date Instrument Result Settlement
Jun 23 T-BILL Jun 24 Jun 24
Target Amount Bid Amount Accented Amount
Rs. 2.59 Bln. Rs.30.645 Bln Rs.12.580
Instrument Date Amount
||10 Jul 2.298 bln.
||15 Jul 100 mln.
||20 Jul 5.809 bln
||10 Jul 300 mln.
This Week 1 WK Avo 1 Yr. An
Treasury Bill Rates
This Week 1 Wk Avo 1 Yr. Avo