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 |
|
