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.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| |
THIS WEEK |
1 WK AGO |
1 YR AGO |
| 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% |
| AUCTIONS |
| 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 |
| MATURITIES |
| Instrument |
Data |
Amount |
T-Bill |
04 May |
28,050 Mln |
T-Bill |
18 May |
4,425 Mln |
REPO RATES |
|
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. |
| TREASURY
BILL RATES |
| 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 |
