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Pakistan Money Market Review

Updated on Mar 12, 2001

The interbank market witnessed significant inflows the past week. With an OMO only Rs. 4.0 billion expected on Thursday, the interbank market was taken by surprise on news of Government of Pakistan 20 yr. loan maturity. The loan plus the interest maturity amounted to in excess of Rs. 10 billion according to unconfirmed reports. This inflow was reported on Wednesday which soon saw the dry inter bank market squaring off. Earlier in the week discounting to the tune of Rs. 6.30 bln and 3.89 bln and 200 mln was witnessed on Monday, Tuesday and Wednesday respectively. Even after the acceptance of Rs. 5.50 billion in the OMO causing a net outflow of Rs. 1.5 billion, the market reflected a liquid scenario. Brisk activity was witnessed in one and two week tenors with trades at 8.00% in both the tenors with bids falling to as low as 5.00% in the one week tenor.

The term market which continues to be under pressure since the last T-Bill auction reflected the same the past week as well. Trades were however scarce in the repo market but rates fell off sharply for call transitions. One month repo levels still holding firm due to the quarter end on March 31st remained in the band of 11.25% and 11.75% while call offers fell from 14.00% (nominal activity was witnessed at this level) to as low as 12.75%. It were the longer tenors of three and six months that reflected the offers coming off sharply. Three month call trades were initially witnessed at 13.50% while later offers were also available below 13.00% after six month borrowers were squared off at 13.00%. It seemed that the inflow on account of the loan maturity did certainly impact the term call market. Rs. 5.50 billion was accepted in the one way OMO (with SBP on the borrowing side and offers being asked for one and four weeks only) for one week at a rate of 9.00%.

The loan maturity that was witnessed the past week will certainly cause the coming T-Bill auction bid pattern to be out of the ordinary. We still do not export any major change in the cut off yields but chances of large amounts being bid close to previous levels do seem to apparent. It is also important to keep in mind that any large acceptance in the T-Bill auction next week, will certainly go in favour of the authorities managing to maintaining a tight money market.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

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THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

11.90

12.75

08.60%

2 Year

12.40

12.75

09.00%

3 Year

12.70

13.00

10.00%

4 Year

13.00

13.00

10.50%

5 Year

13.00

13.25

10.75%

10 Year

13.25

13.50

11.00%

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AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Mar 03  T-BILL Mar 03 Mar 08
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.3,000 Bln 

Rs.11,926 Bln.

Rs.7,700 Bln



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

08 Mar

4,833 Mln

T-Bill

22 Mar

2,850 Mln




REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

02.50

12.90-

10.95

1 Week

03.50

12.25

09.75

1 Month

11.00

11.40

08.00

3 Month

10.90

11.25

07.50

6 Month

11.10

11.50

07.45

1 Year

11.50

11.80

N. A.




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

1 Month

12.00

12.40

09.25

2 Month

11.00

11.35

07.75

3 Month

10.95

11.30

07.60

4 Month

11.00

11.40

07.55

S Month

11.20

11.50

07.60