Pakistan Money Market Review
Updated on Jul 31, 2000
The interbank market remained
under pressure throughout the past week. The acceptance of Rs. 8.50 billion in the T-Bill
auction did not bring about any major change with rates remaining unmoved. Overnight rates
generally maintained a downward slide with trades in the initial parts of the week at
5.50%. Unconfirmed news of inflows also saw the short term rate sliding sharply with
trades on Friday and Saturday as low as 1.50%. However some borrowers were caught by
surprise as overnight offers rose back sharply towards the end on Saturday with trades as
high as high as 7.50%.
The cut-off levels in the T-Bill auction were not brought down any
further, as anticipated. In fact the State Bank, already under pressure by the surge in
the interbank dollar rates, raised the cut-off levels by 22, 19, 36 b.p.s. for the 3, 6
month and the one year papers, respectively. Against a pre-auction target of Rs. 10.75
billion SBP accepted a total face value amount of Rs. 8.095 billion. The term market which
had witnessed moderate activity in the three and six month tenors at 7.00% and 7.15%,
during the week prior to the auction result, rose up sharply. Three and six month offers
jumped upto 7.20% and 7.60%, respectively. The six month offers fell back with trades
being reported at around 7.35% and 7.40%, while three month rates remained mismatched at
7.00% and 7.15%, respectively. One month rates volatile with the upsurge in the cut-off
levels. Bids and offers in the band of 6.30% and 6.75% remained mismatched earlier in the
week but later offers rose sharply to 7.50% while bids were available at 7.00%. Brisk
activity was witnessed in one month call with activity conducted at 8.00% with offers
later falling to 7.75%.
The T-bill auction has brought about a slight change in the interest
rate policy of the present finance regime. However it is generally felt that this auction
result is certainly not a trend maker. The market may have definitely seen the lowest of
cut-off levels in prior auctions and we feel that interest rates on these government bonds
will remain well within the 7.00% and 8.00% band.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
| 1 Year |
07.75 |
07.75 |
09.00% |
| 2 Year |
08.50 |
08.50 |
09.00% |
| 3 Year |
09.00 |
09.00 |
13.25% |
| 4 Year |
09.25 |
09.25 |
13.25% |
| 5 Year |
09.50 |
09.50 |
13.50% |
| 10 Year |
10.00 |
10.00 |
14.00% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| July 26 |
T-BILL |
July
26 |
July 27 |
| TARGET AMOUNT |
BID
AMOUNT |
ACCEPTED AMOUNT |
| Rs. 10,75
Bln. |
Rs.9,145 Bill |
Rs. 8,095
Bln. |
| MATURITIES |
INSTRUMENT |
DATE |
AMOUNT |
| Instrument |
Date |
Amount |
| T-Bill |
07 Jug |
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 |
06.50 |
05.00 |
12.90 |
| 1 Week |
05.88 |
07.50 |
06.50 |
| 1 Month |
06.75 |
06.90 |
04.35 |
| 3 Month |
06.85 |
07.00 |
05.65 |
| 6 Month |
07.23 |
07.10 |
06.85 |
| 1 Year |
07.53 |
07.45 |
N. A. |
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
| 1 Month |
07.35 |
07.50 |
05.75 |
| 2 Month |
07.25 |
07.20 |
05.75 |
| 3 Month |
07.20 |
07.15 |
06.10 |
| 4 Month |
07.25 |
07.15 |
06.25 |
| 5 Month |
07.30 |
07.20 |
06.50 |
|
