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Updated on May 13, 2000

Pakistan Money Market Review

The money market was unmoved from the sky high levels of 10.90% with the discount window being tapped in the early parts of the week. An OMO maturity to the tune of Rs. 5.50 billion on the 10th did manage to ease rates down to 9.00% but rates rose back. The OMO injection on Thursday also caused levels to ease further with deals at 7.50% and finally rates fell sharply on Saturday to as low as 4.50%. However towards the end on Saturday the market rose back with overnight activity as high as 8.00%. Reserve averaging on the first day of the week was primarily the reason for this slide in rates. The one week tenor also caused rates to move between wide bands. Large amounts were dealt on Friday initially at 8.25% and 8.50% while later rates rose to 9.50% with most of the activity being system generated. The temporary fall in overnight levels to 6.00% on Saturday also caused one week to fall sharply with trades at 7.00%, 6.00% and 5.50% as well.

The general sentiment in the term repo market was bullish throughout the week. One month levels generally remained between 7.00% and 7.30%, but the only exception was on Monday when trades had been witnessed as high as 7.40%. The injection of Rs. 3 billion in two weeks at 6.00% on Thursday and the week levels falling to 5.75% did put pressure on the offers which were available at 7.10% at one point but offers later rose back. Banks wanting to cover their position over the financial year end were also willing to borrow two month at 7.25% but offers generally remained unmoved from 7.50%. Activity was reported to have been dealt in three and six months around 7.25% but amounts remained thin.

There has been no news on any cut in the discount rate (which stands firmly at 11 %)or any new rate structure on the National Saving Schemes. Trades for one year to maturity FlBs have already been reported in the band of 7.90% and 8.25% as banks continue to lock themselves in longer dated papers. Moderate amount of T-Bills is maturing next week and with term rates already maintaining a firm stance participation at lower levels unlikely. We expect cut-offs being maintained in the coming auction as banks are also looking anxiously to place their liquidity in the new longer dated bonds that are to be introduced by SBP.




1 Year 08.00 08.00 11.50%
2 Year 08.75 08.75 12.00%
3 Year 09.25 09.25 13.75%
4 Year 09.50 09.75 14.00%
S Year 10.00 10.25 14.50%
10 Year 11.00 11.00 15.00%


Bid Date Instrument Result Settlement
May 03 T-BILL May 03 May 04
Target Amount Bid Amount Accepted Amount
Rs. 28.00 Bln

Rs. 29.215 Bln

Rs. 21.515 Bln


Instrument Data Amount


04 May

28,050 Mln


18 May

4,425 Mln




This Week

1 Wk Ago

1 Yr. Ago

Overnight 08.00 10.95 13.95
1 Week 06.00 09.00 13.65
1 Month 06.90 06.85 12.10
3 Month 07.10 06.85 10.85
6 Month 07.15 07.05 10.75
1 Year 07.55 07.55 N. A.



Maturing This Week 1 Wk Ago 1 Yr Ago
1 Month 07.35 07.75 13.00
2 Month 07.15 07.35 11.90
3 Month 07.15 07.15 11.50
4 Month 07.20 07.20 11.40
5 Month 07.20 07.20 11.35