Pakistan Money Market Review
Updated on Jul 17, 2000
The inter-bank market maintained the soft tone throughout the past
week. Overnight trading was conducted amid excessively liquid conditions, with rough
estimates suggesting approximately Rs. 15-17 billion of liquidity in the money market.
Trades were conducted at rock bottom levels of 0.50% and 0.75%, while some activity was
also reported at 0.40%. One week funds were also placed as low as 2.75%, which the
borrowers were lucky to have taken advantage of as overnight levels rose in the later half
the week. The T-Bill auction coupled with FX Swap maturities caused an outflow of
approximately Rs. 12.50 billion which did bring the overnight and one week levels at
around 6.50% and 7.50% but later one week activity was reported in forward dates close to
6.00%
The term market did not generate any major activity in the past week
with occasional trades in the one month tenor. Activity was witnessed at around 6.25% and
6.50% but bids later fell of to 5.75% with lack of lending interest at this level. Towards
Friday the one month rose sharply with offers quoted at 7.50% but bids unmoved from 6.50%
and 6.75%. Three and six month offers fell to 7.00% the start of the week, but only rose
towards the auction date as offers moved to around 7.25% in both the tenors. However
bidders failed to show any significant interest higher than 7.10%. The pre-auction target
of Rs: 2.926 billion in the overflowing market witnessed a total participation of Rs.
17.12 billion. The State Bank in fact managed to pick up a total amount of Rs. 9.05
billion at levels which were lower than the previous cut-offs, 6.88% for the three month,
7.20% for the six month while all bids for the one year paper were rejected. This was a
acceptance which was not forced by the SBP, as mentioned in our last weekly.</p>
<p align=" justify>The acceptance of the large amount in the auction has also
reflected that the authorities are not bent upon bringing down the cut-off any further.
The presence of the excess liquidity due to continuous maturities of National Saving
Schemes investments, was also to be blamed for the heavy participation in the T-Bill
auction. Furthermore the term repo levels have also settled down significantly since June
30th, an indication which the State Bank had been hoping for.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
| 1 Year |
07.75 |
07.65 |
10.50% |
| 2 Year |
08.50 |
08.50 |
10.50% |
| 3 Year |
09.00 |
09.00 |
13.50% |
| 4 Year |
09.25 |
09.25 |
13.75% |
| 5 Year |
09.50 |
09.75 |
14.00% |
| 10 Year |
10.00 |
10.00 |
14.50% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| Jun 12 |
T-BILL |
Jun
12 |
Jun 13 |
| TARGET AMOUNT |
BID
AMOUNT |
ACCEPTED AMOUNT |
| Rs. 2,926Bln. |
Rs.17,120.305
Bln. |
Rs. 9,050
Bln. |
| MATURITIES |
INSTRUMENT |
DATE |
AMOUNT |
| T-Bill |
07 Jul |
2276,985 Mln |
| T-Bill |
13 Jul |
600 Mln |
| T-Bill |
21 Jul |
5,750 Mln |
| T-Bill |
27 Jul |
2250 Mln |
REPO RATES |
|
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
| Overnight |
06.50 |
00.75 |
12.90 |
| 1 Week |
07.35 |
03.25 |
11.50 |
| 1 Month |
07.10 |
06.50 |
08.75 |
| 3 Month |
07.00 |
06.75 |
07.80 |
| 6 Month |
07.05 |
07.15 |
08.90 |
| 1 Year |
07.50 |
07.45 |
N. A. |
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
| 1 Month |
07.80 |
07.40 |
09.50 |
| 2 Month |
07.40 |
07.25 |
08.50 |
| 3 Month |
07.25 |
07.15 |
08.25 |
| 4 Month |
07.25 |
07.15 |
08.50 |
| 5 Month |
07.25 |
07.20 |
08.75 |
|
