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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

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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