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Pakistan Money Market Review

Updated on Aug 07, 2000

The interbank market which had closed long last week, witnessed rates climbing sharply with the market closing short at the end of the reporting week, i.e. Friday. News of some unaccounted for outflows from the market could only be blamed for such a sudden change. Short term rates at around 5.00% and 6.00% soon crossed into double digit levels with overnight trades being witnessed at 10.50% and later at 10.95%. The discounted figure at the SBP repo window initially at approximately Rs 2.5 billion later touched the Rs. 6 billion mark on Friday. The one and two week market which had remained in between 6.50% and 7.50% saw trades at 8.00% for one week and two weeks at similar levels as well. The State Bank also failed to alleviate the short market on Thursday in the regular OMO with any injection and in fact managed to outright sell T-Bills at 7.40%.

The term repo market also took a sharp turn with one offers rising sharply from 7.00% to as high as 8.25% later in the week. It must have the unanticipated discounting figure that caused this panic in the one month market. However dealers in the market realizing that this panic could be short lived place amounts at levels of 7.75% and later on Saturday at 7.50% as well. The three and six month market, which has already been affected due to the rise in the SBP cut-off levels, could not generate any major activity. Nominal amounts traded for six month at close to 7.40% while three month rates generally remained mismatched in the band of 7.25% and 7.40%. Majority of the banks participating in the OMO having indicated borrowing interest to the tune of Rs. 7.05 billion were not entertained by the authorities in the two week and one month tenor. However, against bids of Rs. 1.75 billion and Rs. 1.20 billion for the three month and the outright paper, SBP sold T-Bills to the tune of only Rs. 300 million at 7.40%.

The interbank market had been waiting anxiously for the OMO, conducted this week, in order to gauge the kind of levels that the State Bank would be looking for. The acceptance of such a meager amount reflects that the cut-off levels are to stay. However, participation in the coming T-Bill auction, keeping in mind an expected pre-auction target of approximately Rs. 15 billion, is to be at levels higher than previous cut-offs.

 

YIELD PROFILE

FEDERAL INVESTMENT BONDS

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THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year 08.10 07.75 09.00%
2 Year 08.35 08.50 12.00%
3 Year 08.85 09.00 12.75%
4 Year 09.00 09.25 13.00%
5 Year 09.35 09.50 13.25%
10 Year 09.50 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 Bln.

Rs. 8,095 Bln.

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill 10 Aug 2,350 Mln
T-Bill 11 Aug 13,309 Mln
T-Bill 24 Aug 1,600 Mln
T-Bill 26 Aug 6,360 Mln

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight 10.25 06.50 12.50
1 Week 08.63 05.88 04.00
1 Month 07.50 06.75 04.75
3 Month 07.35 06.85 05.70
6 Month 07.38 07.23 06.70
1 Year 07.60 07.53 N. A.

 


 

TREASURY BILL RATES
MATURING THIS WEEK 1 WEEK AGO 1 YEAR AGO
1 Month 08.50 07.35 06.00
2 Month 07.65 07.25 06.10
3 Month 07.50 07.20 06.25
4 Month 07.50 07.25 06.50
5 Month 07.50 07.30 06.50