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Pakistan Money Market Review

Updated on Jul 24, 2000

The interbank market maintained a soft tone in the early parts of the past week. Overnight trading was in between 4.00% and 6.00% while one week levels at around 7.50% reflecting a slight bullish sentiment keeping the OMO during the week. The outright sale of T-Bills caused an outflow of Rs. 5.70 billion in the OMO did cause levels to rise sharply and cross into double digits. However it was the unexpected trend witnessed on Friday that saw rates taking a sharp twist. Trading initially at 6.00% and later at levels of 10.00% and 10.90% and finally a discounting of approximately Rs. 1.5 billion that took dealers by surprise. Rates reversed on Saturday with rates falling sharply towards the close of dealing hours. Trades were initially conducted at 10.25% and 10.50% but soon the market saw a fury of lending pressure causing bids to ease to 8.00% and 9.00%. Heavy amounts were traded at close to these levels with the day finally closing long with trades at 4.50% and 5.00%.

The term market also went through the volatile phase of short term rates moving between wide bands. One month activity was reported at 7.00% on Monday and Tuesday but later offers were seen falling sharply to 6.50%. During the process amounts changed hands mostly through system generated trades at 6.60% and 6.75%. The two way OMO only saw SBP picking up Rs. 5.70 billion by outright selling T-Bills at 7.19%. However, contrary to expectation, banks had also participated on the borrowing side in the two week tenor. One month rates rose back sharply and bids and offers were quoted at 7.00% and 7.50% but later offers fell back to 7.25% which were available in forward dates. Significant interest was evident in the three and six month tenors with offers in the two tenors 7.00% and 7.15% prior to the OMO. Three month trades were witnessed at around 7.00% and later at close to 7.20% while nominal amounts also changed hands at around 7.20% in the five and six month tenors.

Chances of a tighter market, after the market went short on Friday, have some what been ruled out. Offers have fallen sharply in the term market as general borrowing in term market has also been lacking. Participation in the scheduled T-bill auction next week will certainly be well within the ongoing band with the cut-off levels also being maintained without any major emphasis on the target amount.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

07.75

07.75

09 75%

2 Year

08.50

08.50

09.75%

3 Year

09.00

09.00

13.50%

4 Year

09.25

09.25

13.75%

5 Year

09.50

09.50

14.00%

10 Year

10.00

10.00

14.50%

 


 

AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
July 12 T-BILL July 12 July 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

2,276 Mln

T-Bill

13 Jul

600 Mln

T-Bill

21 Jul

5,750 Mln

T-Bill

27 Jul

5,000 Mln

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

05.00

06.50

12.95

1 Week

07.50

07.35

12.50

1 Month

06.90

07.10

08.00

3 Month

07.00

07.00

07.45

6 Month

07.10

07.05

07.90

1 Year

07.45

07.50

N. A.

 


 

TREASURY BILL RATES
MATURING THIS WEEK 1 WEEK AGO 1 YEAR AGO

1 Month

07.50

07.80

08.75

2 Month

07.20

07.40

08.25

3 Month

07.15

07.25

07.75

4 Month

07.15

07.25

08.25

5 Month

07.20

07.25

08.50