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Updated on Apr 17, 2000

The interbank market went through a volatile phase throughout the past week. Overnight activity was mixed with lowest trades at around 1.50% and highest at 10.00%. The volatility further increased on Thursday with the announcement of the two way OMO. Overnight rates touched 7.00% and 8.00% but lenders failed to extend the gain and rates fell back to 5.00% with trades not higher than 8.50% on Friday. One and two week activity had earlier been conducted in between 6.00% and 7.00% while call deals were also reported at 8.25% in both the tenors.

The term market turned upwards as the week progressed and the one month tenor rose sharply but falling marginally early in the week. Trades at 5.75%, 5.50% and as low as 4.75% were reported in the market. However it was not long before rates turned around with one month trades taking place in forwards at levels as high as 6.25%. Offers after the announcement of OMO result were available at 7.50% while bids only managed to touch 6.75%. The three and six month tenor failed to be fuelled up in any significant way as dealers had already kept the scheduled OMO in mind. Offers in both the tenors did fall to a low of 6.60% and 6.90% but bidders preferred to stay away. The OMO caused these levels to jump up with offers in both three and six month tenors at 7.00% and 7.20%, respectively. The two way OMO on Thursday attracted bids on both sides with borrowers looking for funds for one month while money was also placed against the outright sale of T-Bills. SBP kept its ground of a low interest rate scenario and picked up Rs. 2.20 billion against the outright sale of the 6 month T-Bill. The availability of funds for SBP at this level in the OMO was not a surprise for dealers in the market as offers for the six month repo had fallen to as low as 6.90% prior to Thursday.

With a T-Bill auction scheduled for next week, dealers in the market would be anxiously looking out as to what kind of a target amount SBP announces, keeping in mind only Rs. 300 million of T-Bills are maturing on the 20th and the 21st. We feel that a large acceptance would not be a difficult task for the Central Bank.




1 Year 08.25 08.00 10.25%
2 Year 09.25 09.00 13.25%
3 Year 10.00 09.75 13.50%
4 Year 10.25 10.00 13.75%
S Year 10.75 10.75 14.25%
10 Year 11.25 11.25 14.50%



Bid Date Instrument Result Settlement
Apr 05 T-BILL Apr 05 Apr 06
Target Amount Bid Amount Accepted Amount
Rs.2.5 Bln

Rs. 22.560 Bln




T-Bill 06 Apr 2,300 Mln
T-Bill 20 Apr 150 Mln
T-Bill 21 Apr 150 Mln




Overnight 07.00 03.00 13.95
1 Week 06.50 04.50 12.00
1 Month 06.90 06.25 09.50
3 Month 06.90 06.70 09.35
6 Month 07.10 06.85 09.20
1 Year 07.75 07.75 N. A.



1 Month 07.75 06.75 10.75
2 Month 07.35 06.80 10.50
3 Month 07.30 06.90 10.15
4 Month 07.25 06.95 10.00
5 Month 07.10 06.95 09.75