Updated on Feb 21, 2000
The interbank market witnessed
overnights trading at both ends of the spectrum. A T-Bill maturity of Rs. 5.30 billion on
the 15th kept rates soft within the 1.00%--2.00% range but trades were finally witnessed
at 10.90% on Friday and within 9.00% and 10.50% on Saturday. In fact the market closed
short on Friday with nominal amounts being discounted. Agricultural payments and the
acceptance in the latest OMO on Thursday were reported to be the factors which caused
short-term levels to rise sharply towards the end of the week. One-week trades had
initially been conducted at 5.00% and were also reported at 7.00% towards the later half
of the week.
The term market was active with concentration in the one-month and the
six-month tenors. Expecting no change, heavy trades in the 1 month tenor from forward
dates i.e. from the 21st had been witnessed in between 6.50% and 7.50% while some activity
was also reported at 6.50% during the last week. Lenders expecting an OMO on the 21st, on
account of the outflow of Rs. 19 billion from the market, had been continuously lending.
It was only later that rates rose which caused one-month levels to cross 7.00%. Three
month bids and offers were available at 6.80% and 7.25% with rates remaining mismatched.
Moderate trading was witnessed in repos maturing end of July with levels in between 7.25%
and 7.40% from the 21st. Six month bids and offers were also available at 7.25% and 7.50%
but trades were scarce. The SBP this week intervened to mop up funds to the tune of Rs.
3.40 billion by way of outright sale and the three-month repo with the cut-offs at 7.48%
and 7.74%, respectively.
The special intervention announced by the SBP for Monday would mean
that an inflow of approximately Rs. 20 billion could manage to keep equilibrium in the
market. Bids are expected to be concentrated in the one-month tenor keeping in mind the
inflows on the 24th and also the outflows in the early week of March. With chances of a
net injection appearing to be fairly decent, the 3 to 6 month repo market is likely to
maintain status quo with an upward swing clearly not in the offing.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| 1 Year |
08.25 |
08.50 |
13.65% |
| 2 Year |
08.75 |
09.00 |
14.25% |
| 3 Year |
09.50 |
09.50 |
14.25% |
| 4 Year |
09.75 |
10.00 |
1450% |
| 5 Year |
10.00 |
10.25 |
15.25% |
| 10 Year |
10.50 |
11.75 |
16.25% |
| AUCTIONS |
| Bid Date |
Instrument |
Result |
Settlement |
| Feb
09 |
T-BILL |
Feb 09 |
Feb 10 |
| Target Amount |
Bid
Amount |
Accepted Amount |
| Rs. 14.4 Bln |
Rs36.650 |
Rs. 8.950 Bln |
| MATURITIES |
| T-Bill |
02 Feb |
8,885 Mln |
| T-Bill |
10 Feb |
100 Mln |
| T-Bill |
15 Feb |
5,300 Mln |
| T-Bill |
24 Feb |
25 Mln |
| T-Bill |
26 Feb |
3,525 Mln |
REPO RATES |
| Overnight |
09.75 |
03.50 |
00.50 |
| 1 Week |
06.80 |
05.00 |
04.25 |
| 1 Month |
06.90 |
06.70 |
09.50 |
| 3 Month |
07.10 |
07.00 |
11.90 |
| 6 Month |
07.35 |
07.50 |
12.70 |
| 1 Year |
08.25 |
08.50 |
N. A. |
| TREASURY
BILL RATES |
| 1 Month |
07.00 |
06.50 |
09.00 |
| 2 Month |
07.10 |
07.00 |
10.50 |
| 3 Month |
07.15 |
07.10 |
11.75 |
| 4 Month |
07.25 |
07.20 |
12.75 |
| 5 Month |
07.35 |
07.40 |
12.90 |
