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Updated on Jun 26, 2000

The interbank market went through another dry period this week with overnight trades being conducted at peak levels of 10.95% and 11.00%. Trading remained thin with continuous visits to the SBP discount window by the banks. According to unconfirmed reports a maximum of Rs. 13 billion was discounted this week. The OMO injection on Thursday did cause the discounting figure to fall into the single digit band and reported at around Rs. 5 billion on the weekend. News on the reduction of the return on the National Savings Schemes did cause medium to long term rates to ease marginally but only to be seen rising slightly after the OMO as the injection was less than anticipated. However this spike was short lived.

One month remained volatile with the general lack of trades but bids and offers being quoted between wide bands and various levels. One month offers were present around 10.00% with bids hovering around 9.00% while later towards Friday quotes were available at 8.35% and 8.90%. Reduction in the discounting figure also led to one month offers being quoted at these levels. Furthermore the reduction in discounting has also been attributed to inflows on account on export rebate payments. Three month trades were conducted with activity in between 7.30% and 7.75%. The traded amounts however remained moderate. The six month tenor has not reflected any trading interest with bids and offers remaining mismatched at 7.45% and 7.70% on the weekend. Another reason for six month rates remaining at previous levels after the budget speech has been no news of reduction of the discount rate. In fact the SBP governor in a recent speech has dismissed any chances of the discount rate being lowered from the existing level of 11.00%. The State Bank continued to announce two way OMOs but maintained on injecting liquidity to the tune of Rs. 7.90 billion for two weeks at 8.00%.

The overall trend of repo rates in the secondary market still seems bearish keeping taking in to account the liquidity positions of banks have eased considerably and the hence the discounting figure has plunged significantly. Lenders in three and six month tenors are looking to lock in their liquidity but significant borrowing interest is still hard to find. Another intervention towards the year end cannot be ruled out either in the money or the foreign exchange markets and traders are now hesitant to place their bets on a net shortage in the market on June 30th.

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year 08.25 08.25 09.50%
2 Year 09.00 09.00 09.50%
3 Year 09.50 09.50 12.50%
4 Year 09.75 09.75 12.75%
5 Year 10.00 10.00 13.00%
10 Year 10.50 10.50 14.00%

 


 

AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Jun 14 T-BILL Jun 14 Jun 15
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs. 1.362 Bln.

Rs. 6.806 Bln.

  Rs. 1.000 Bin.

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill 01 Jun 50 Mln
T-Bill 15 Jun 1,750 Mln
T-Bill 23 Jun 1,045 Mln
T-Bill 29 Jun 100 Mln

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight 10.90 10.95 09.50
1 Week 10.25 10.75 07.50
1 Month 08.40 09.40 07.00
3 Month 07.60 07.60 07.00
6 Month 07.50 07.55 07.70
1 Year 07.60 07.70 N. A.

 


 

TREASURY BILL RATES
MATURING THIS WEEK 1 WEEK AGO 1 YEAR AGO
1 Month 09.25 10.50 07.50
2 Month 08.25 09.10 07.15
3 Month 07.75 08.15 06.90
4 Month 07.70 08.00 07.35
5 Month 07.65 08.80 07.50