Pakistan Money Market Review
Updated on May 12,
2001
A tight money market was the highlight of the past
week. Overnight rates glued to the 12.95% level and banks availing the
repo discounting facility was witnessed throughout the week. Reserving
averaging of the cash reserve ratio caused the discounting figure to
vary from Rs. 4.60 billion to Rs. 9.80 billion on Friday. However the
market managed to square itself on Saturday with banks reported to have
closed long. Initial trades were conducted at 12.90% but towards the end
offers were reported to have fallen off to 11.00%. This ease did come as
a surprise. It were the trades in the one week and two week tenor as
high as 12.50% that caused players to wonder anxiously about this
unexpected change.
Players in the repo tenor were interested mostly in
the one month tenor which remained volatile. Activity at 11.25% was
nominal but offers soon moved up to 11.75% while trades were conducted
at 11.50% as well. This trend continued till the end of the week with
activity within the narrow band of 11.50% and 11.75%. However the
amounts traded in between these levels were nominal. Three month and six
month repo trades were hard to come by and offers remaining close to the
T-Bill cut-offs. Borrowers on the other hand generally preferred to
reflect their interest in call transactions, as premiums were relatively
lower than usual. Three month activity was conducted at around 12.00%
while six month call trades was also reported to have been witnessed at
levels close to 12.30%. The OMO, falling during this week. was conducted
with the authorities only announcing two, four and eight week repos.
Participation was reported to have been mostly in the eight week tenor
but SBP rejected all bids received.
The announcement of a one way OMO in a short market
continues to reflect the sentiment that the authorities are destined to
follow. Maturities coupled with two primary activities in the shape of
the T-Bill and the PIB auction are due next week. The target of the PIB
auction Rs. 3 billion a similar target expected for the T-Bill we feel
that the authorities will manage achieve the target amounts for both the
GoP debt instruments.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
|
I Year |
12.25 |
12.25 |
08.00% |
|
2 Year |
12.50 |
12.50 |
08.75% |
|
3 Year |
12.75 |
12.75 |
09.25% |
|
4-Year |
12.90 |
12.90 |
09.50% |
|
5 Year |
13.00 |
13.00 |
09.75% |
|
10 Year |
13.50 |
13.50 |
10.75% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| May
02 |
T-BILL |
May
02 |
May
03 |
| TARGET AMOUNT |
BID AMOUNT |
ACCEPTED AMOUNT |
| Rs.
10,550 Mln |
Rs.27,220 Mln. |
Rs.21,670
Mln |
|
|
| MATURITIES |
INSTRUMENT |
DATE |
AMOUNT |
|
T-Bill |
03 May |
10,550 Mln |
|
T-Bill |
17 May |
3,650 Mln |
|
T-Bill |
31 May |
8,835 Mln |
|
|
|
REPO RATES |
|
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
Overnight |
11.00 |
12.90 |
10.90 |
|
1 Week |
12.00 |
11.00 |
09.00 |
|
1 Month |
11.50 |
10.75 |
07.25 |
|
3 Month |
11.20 |
11.00 |
07.25 |
|
6 Month |
11.40 |
11.30 |
07.15 |
|
1 Year |
11.75 |
11.65 |
N.A |
|
|
|
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
1 Month |
12.50 |
11.75 |
07.75 |
|
2 Month |
11.40 |
11.30 |
07.30 |
|
3 Month |
11.15 |
11.00 |
07.20 |
|
4 Month |
11.20 |
11.10 |
07.25 |
|
5 Month |
11.40 |
11.30 |
07.25 |
|
|
