Updated on Dec 20, 1999
The overnight trades in the money market were witnessed between wide
bands. Early parts of the week saw trading in single digits but later rates touched 12.90%
while later closing at around 11.50% at the end of the week. This hike in rates was
witnessed on the day of the T-Bill auction settlement when a net outflow of Rs. 2.85
billion was witnessed.
Indications of a 2.00% reduction in the cost of the domestic borrowings
failed to affect the term repo market the past week, as the Finance Minister in the recent
press conference discussed no specific details to this effect. Year end positions were
clearly a reason for the firmness in rates, which was more than adequately reflected in
the one month tenor where amounts were dealt as high as 12.50% in call. However the
general bearish sentiment towards long-term interest rates was evident from the bid
pattern in the latest T-Bill auction on Wednesday. Bids for six month and one year bills
started from 10.00% and 10.31%, respectively. SBP picked up Rs. 1.95 billion with the
cut-offs for the six month and one year papers at 10. 13% and 10. 34%, respectively.
Interest was evident in the three month tenor as well with rates against FIBs touching
10.75%. However, against T-Bill, bids and offers were available at 9.60% and 10.00%,
respectively with rates remaining mismatched.
Talk of an imminent fall interest rates did prompt certain banks to bid
aggressively for the one year instrument in the latest auction. But the recent economic
initiatives announced have been less than specific on that front. However, it appears that
with the year end around the corner, short-term rates will have little room to fall. The
exemption of NSS instruments from withholding tax has also made them more attractive and
this is expected to put further strain on the overall liquidity status of the market as
the year comes to a close coupled with the various banks' lottery schemes being abolished.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| |
THIS WEEK |
1 WK AGO |
1 YR AGO |
| 1 Year |
11.00 |
11.25 |
13.10% |
| 2 Year |
12.25 |
12.25 |
13.10% |
| 3 Year |
12.75 |
13.00 |
14.00% |
| 4 Year |
13.00 |
13.25 |
14.25% |
| 5 Year |
13.50 |
13.75 |
14.75% |
| 10 Year |
14.00 |
14.25 |
16.00% |
| AUCTIONS |
| Bid Date |
Instrument |
Result |
Settlement |
| Dec
15 |
T-BILL |
Dec 15 |
Dec 16 |
| Target Amount |
Bid
Amount |
Accepted Amount |
| Rs. 01.9
Bln. |
Rs. 08.400 Bln |
Rs.01.950 Bln |
| MATURITIES |
| Instrument |
Data |
Amount |
| T-Bill |
02 Dec |
750 Mln |
| T-Bill |
05 Dec |
200 Mln |
| T-Bill |
16 Dec |
1,000 Mln |
| T-Bill |
23 Dec |
950 Mln |
REPO RATES |
|
This Week |
1 Wk Ago |
1 Yr. Ago |
| Overnight |
12.25 |
04.50 |
12.50 |
| 1 Week |
11.00 |
10.00 |
10.00 |
| 1 Month |
11.35 |
10.25 |
09.50 |
| 3 Month |
09.65 |
09.00 |
11.35 |
| 6 Month |
09.70 |
09.50 |
12.10 |
| 1 Year |
11.00 |
11.25 |
N. A. |
| TREASURY
BILL RATES |
| Maturing |
This Week |
1 Wk Ago |
1 Yr Ago |
| 1 Month |
12.25 |
10.25 |
14.00 |
| 2 Month |
10.90 |
10.00 |
10.75 |
| 3 Month |
10.35 |
09.20 |
11.25 |
| 4 Month |
10.15 |
09.30 |
11.65 |
| 5 Month |
10.00 |
09.50 |
11.85 |
