Updated on 19th July, 1999
The interbank market in the early parts of the week went short on
account of the outflow by way of the increase in the SLR. Overnight trades were conducted
at 12.90% and 12.95% but levels did ease but only marginally.
Some activity was also witnessed at 1250% upon the injection of
liquidity into the system by SBP. However the injection of Rs. 4.75 billion was
insufficient and the following day i.e. Friday the market was short but approximately Rs.
4.5 billion. Rates closed at 12.90% at the end of the weekend though the system registered
an OMO maturity of Rs. 2.30 billion but not much change could be witnessed with the market
closing back to a 12.90% at the end of the day. The two week tenor saw active interest
prevailing in the market. Earlier two week rates shot upto to 11.25% but later fell back
to 10.00% at which nominal amounts were traded.
Volatility persisted in the term market with rates rising in the
earlier parts of the week but gradually easing off and rising back at the end of the week.
One month levels went to as high as 11.25% with no activity but later fell back into
single digits and trades were witnessed at around 9.00%. The ease in levels was only due
to the injection of Rs. 4.75 billion for one week at a rate of 8.25%. One month bids and
offers remained at 8.60% and 9.00% on Saturday but trades were scarce. The three month
tenor did see moderate activity but only when rates fell below 8.00%. On seeing the
discounting figure being reduced considerably on Wednesday lenders were quick to react and
placed funds between 7.70% and 7.90% but again trades were conducted around the same
levels after the OMO. The six month did nor generate any significant interest in the past
week with offers in the band of 9.00 and 9.25% but bids remaining at close to 8.50%.
Long dated instruments failed to gain any major interest,