. .



Pakistan Money Market Review

Updated on Aug 28, 2000

The interbank market remained gripped with the liquidity being concentrated in a few hands only. The overnight rate moved between a wide band. Trading in double digits at the start of the week while at levels close to 4.00% and 5.00% after the Special OMO on Saturday was the highlight. The need for conducting the Special OMO was primarily due to the market running long after only Rs. 1.5 billion was accepted in the T-Bill auction. SBP managed to mop up Rs. 4.20 billion in the OMO.

The term market maintained its firm stance throughout the past week with only a marginal ease after the announcement of the T-Bill result. No major trades were witnessed in the one month tenor with rates being quoted at levels of 6.80% and 7.25%. Offers did ease off to 7.00% during the week but to seen climbing back up. Three month activity in the band of 7.10% and 7.20% was reported while six month bids and offers remained mismatched at levels of 7.35% and 7.50%. The six month tenor continues to reflect the bullish sentiment that market players have in mind. The bid pattern in the auction conducted the past week also reflected the expectations of the participants who were unwilling to place any significant amounts at the previous cutoff levels. Rs. 1.621 billion was accepted at levels of 7.38% and 8.06% for the six month and one year papers, respectively. The authorities announced an OMO, a Special which was the first of its kind in which participation was not announced for the 5 month repo and the outright sale of T-Bills. Instead SBP was willing to borrow through repos for the 2, 4, 6 and 8 week tenors, and also reverse repos for the usual 2 and 4 week tenors. As per the market expectations SBP borrowed in the 4 week and 6 week tenor at levels of 7.25% and 7.35%, respectively. The total amount accepted being Rs. 4.20 billion.

No major hike in interest rates was evident, especially after the fact the market continues to be liquidity driven. However, SBP's announcement of the Special OMO in the 2, 4, 6 and 8 weeks reflects to the fact that banks will generally be interested in placing funds to the State Bank in shorter tenors than the traditional 3, 5 months and against the outright sale of T-Bills.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

08.25

08.25

10.25%

2 Year

08.50

08.50

12.25%

3 Year

09.00

09.00

13.00%

4 Year

09.25

09.00

13.25%

5 Year

09.50

09.25

13.50%

10 Year

09.75

09.75

14.00%

 


 

AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Aug 23 T-BILL Aug 23  Aug 24
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.8,161 Bln

Rs.8,571 Bln

Rs.1.621 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

05.50

07.50

12.95

1 Week

06.00

06.50

12.75

1 Month

07.00

07.00

09.00

3 Month

07.15

07.20

08.50

6 Month

07.35

07.40

09.20

1 Year

07.90

07.75

N. A.

 


 

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

1 Month

07.75

08.00

09.75

2 Month

07.35

07.35

09.00

3 Month

07.40

07.25

08.75

4 Month

07.45

07.35

09.00

5 Month

07.50

07.40

09.25