Updated on Feb 28, 2000
An OMO injection on the 21st kept
the market from closing short due to the outflow of Rs. 19 billion on the same day. Rates
did turn firm and trades were witnessed rising from 6.00% to close around 10.00%. There
was no change in rates for the rest of the week and overnight activity was mostly
conducted in the narrow double-digit band of 10.00% and 11.00%. The money market
experienced shortness on Thursday and Friday and according to market estimates, amounts
anywhere close to Rs. 6-7 billion were reported to have been discounted on the 21st, the
last day of the reporting week. However rates eased off on Saturday due to the T-Bill
maturity of Rs 3.525 billion. The market closed at around 9.75% but not before banks had
traded overnight funds at 10.95%.
The injections of Rs. 4.40 billion and Rs. 11 billion in the one month
and two week tenor at 6.50% and 6.00% respectively reflected the State Bank's drive to
keep rates under pressure. However one-month repo rates in the market rose on account of
the liquidity crunch and offers touched a high of 8.00% while bids remained around 7.60%.
Trades were reported at 7.50%. Three and six month activity was nominal at around 7.20% in
six month and at 7.35%. The auction the past week reflected the continued pressure on
T-Bill rates. Against a pre-auction target amount of Rs. 3.50 billion SBP managed to
receive a total of Rs. 13.877 billion and picked up only Rs. 2.75 billion. The cut-off for
the three-month, six-month and one-year papers were 7.29%, 7.45% and 7.90%, respectively.
The market is expected to remain in high single digit levels but
chances of discounting next week seem slim. Offers for one month have already fallen off
on Saturday and some lenders even tried to lock in their funds for one and two weeks.
Three month bids also fell off in the post auction scenario and bids were also hard to
come by from forward dates. This trend is expected to continue as the regular OMO on
Thursday draws near.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| 1 Year |
08.75 |
08.25 |
13.00% |
| 2 Year |
09.25 |
08.75 |
14.00% |
| 3 Year |
09.75 |
09.50 |
14.00% |
| 4 Year |
10.00 |
09.75 |
14.25% |
| 5 Year |
10.50 |
10.00 |
14.75% |
| 10 Year |
11.00 |
10.50 |
15.50% |
| AUCTIONS |
| Bid Date |
Instrument |
Result |
Settlement |
| Feb
23 |
T-BILL |
Feb 23 |
Feb 24 |
| Target Amount |
Bid
Amount |
Accepted Amount |
| Rs. 3.5
Bln. |
Rs. 13.877
Bln. |
Rs. 2.75
Bln. |
| MATURITIES |
| T-Bill |
02 Feb |
8,885Mln |
| T-Bill |
10 Feb |
100 Mln |
| T-Bill |
15 Feb |
5,300 Mln |
| T-Bill |
24 Feb |
25 Mln |
| T-Bill |
26 Feb |
3,525Mln |
REPO RATES |
| Overnight |
09.75 |
09.75 |
00.25 |
| 1 Week |
09.00 |
06.80 |
01.25 |
| 1 Month |
07.25 |
06.90 |
08.25 |
| 3 Month |
07.35 |
07.10 |
11.45 |
| 6 Month |
07.55 |
07.35 |
12.30 |
| 1 Year |
08.25 |
08.25 |
N. A. |
| TREASURY
BILL RATES |
| 1 Month |
08.00 |
07.00 |
07.25 |
| 2 Month |
07.50 |
07.10 |
08.25 |
| 3 Month |
07.40 |
07.15 |
10.75 |
| 4 Month |
07.45 |
07.25 |
11.50 |
| 5 Month |
07.55 |
07.35 |
11.90 |
