Updated on Mar 27, 2000
The interbank market maintained a
firm stance throughout the past week with most of the overnight trading taking place in
double-digits. An OMO outflow to the tune of Rs. 11 billion kept rates from easing off
after the Eid holidays. Discounting was reported at SBP and the figure was estimated to
have also crossed into double digits. However the discounting figure fell off to around
Rs. 5 billion on the 22nd due to another OMO maturity of Rs. 6.2 billion. Rates on
Saturday were volatile with trades between the band of 9.00% and 10.95%, with rates
closing yet again at 10.95%. One week trades were witnessed at around 9.75% early in the
week with offers later rising to 10.50% but bids unmoved. Rightly so as one week levels
fell off to around 9.00% on the weekend.
Term repo levels which reflected sentiments of bullishness during in
the pre-Eid scenario fell off on the announcement of the latest auction, scheduled for the
22nd. One, two, three and six month offers fell from highs of 8.25%, 8.00%, 7.65% and
7.85%, respectively. Six month trades were conducted prior to banks placing bids in the
auction with moderate amounts changed hands at levels of 7.50%. One and two month levels
also followed suit with trades in these two tenors at 7.75% and 7.70%, respectively. The
three month tenor during the past week remained inactive. Even with the market closing
short a total amount of Rs. 8 billion was bid in the auction against a matched pre-auction
target and maturity of Rs. 4.1 billion. SBP refrained from raising the cut-off and a total
amount of only Rs. 900 million was picked up with single bids at 7.29%, 7.44% and 7.89%
for the three, six month and one year instruments, respectively.
The market has already reflected signs of easing off as witnessed on
the last day of the week with trades as low as 9.00%. An OMO maturity of Rs. 4.05 billion
on the 28th as well as flows related to Eid withdrawals finding their back in to the
system, should keep the market from spiking; although the quarter end has historically
been tricky and unpredictable. Whether or not short term rates remain firm remains to be
seen but there appears to be slim chances for long term rates to rise significantly and
the market sentiment is clearly displaying this. For instance, in spite of the system
registering a net shortage during the week, offers of 3 to 6 month money were relatively
stable at the previous auction cut-off levels, thereby maintaining status quo.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
1 Year |
08.75 |
08.60 |
11.75% |
2 Year |
09.25 |
09.00 |
12.00% |
3 Year |
09.75 |
10.00 |
13.00% |
4 Year |
10.00 |
10.25 |
13.50% |
5 Year |
10.50 |
10.75 |
14.25% |
10 Year |
11.25 |
11.00 |
14.75% |
| AUCTIONS |
| Bid Date |
Instrument |
Result |
Settlement |
| Mar
22 |
T-BILL |
Mar 22 |
Mar 24 |
| Target Amount |
Bid
Amount |
Accepted Amount |
| Rs.4.136 Bln |
Rs. 12.700 Bln |
Rs.900 Mln |
| MATURITIES |
T-Bill |
09 Mar |
12,600 Mln |
T-Bill |
24 Mar |
4,100 Mln |
T-Bill |
25 Mar |
125 Mln |
REPO RATES |
Overnight |
10.90 |
10.95 |
15.50 |
1 Week |
09.25 |
09.75 |
12.50 |
1 Month |
07.90 |
08.00 |
10.75 |
3 Month |
07.45 |
07.50 |
10.00 |
6 Month |
07.50 |
07.45 |
10.75 |
1 Year |
08.25 |
08.60 |
N. A. |
| TREASURY
BILL RATES |
1 Month |
08.80 |
09.25 |
11.50 |
2 Month |
07.80 |
07.75 |
11.65 |
3 Month |
07.70 |
07.60 |
11.00 |
4 Month |
07.65 |
07.55 |
10.90 |
5 Month |
07.55 |
07.60 |
10.75 |
