. .



Pakistan Money Market Review

Updated on June 02, 2001

The inter-bank market remained relatively soft in the early parts of the week with overnight levels at the lower end of the spectrum Lows 2.00% and 3.00% were witnessed while one and two week funds also changed hands at levels of 5.50% and 7.50%, respectively. However, this trend was short lived and after the acceptance in the T-bill auction rates crossed into double digits. The market failed to register any shortfall on account of the excess liquidity in the system which resulted banks squaring their positions. Traders did rush to cover their two week positions and activity was reported in double digit levels of 10.25% and 10.50%, before bids fell back to 9.75%.

The highlight in the term market was the trading that was witnessed in the one month tenor. Trades conducted prior to May 31st were at levels close to 9.75% while levels for crossing the financial year end of June 30th were reported as high as 10.75%. However, borrowers still preferred to wait it out till the end of June rather than pay the significant premium for crossing June 30th. The announcement of the T-Bill auction was the first indication that a significantly large amount would be picked up against the Rs. 8.835 billion pre-auction target. According to unconfirmed reports special T-Bills issued on December 31st last year, maturing on May 31st also amounted to a maturity of approximately Rs. 4-5 billion besides the Rs. 8.835 billion regular T-Bills. The SBP accepted Rs. 22.072 billion by marginally raising the cut-off in the three and twelve month bills to 11.23% and 12.00%, respectively. The six month T-Bill cut-off remained unchanged at 11.60%. There was a spur of activity in the three and six month tenors after the acceptance in the T-Bill auction and banks covered their positions in the respective tenors at levels.

The last month of the financial year end has begun and market players have varied opinions on the June 30th position in the inter-bank money market. We still feel that after even though banks experienced an easy market on the last quarter end i.e. March 31st, this quarter end still makes players stay on the watch out Borrowing pressure persists for crossing that period as evident in one month rates and we feel that if rates in this tenor do ease off into single digit levels heavy borrowing pressure would be evident.

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

10.00%

10 Year

13.50

13.50

10.75%

.


AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
May 30 T-BILL May 30 May 31
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.8,835 Mln  

Rs.25,472 Mln

Rs.22,072 Mln



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

03 June

12,000 Mln

T-Bill

28 June

12,800 Mln




REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

11.00

07.50

10.95

1 Week

10.25

09.00

10.50

1 Month

10.90

10.25

08.15

3 Month

11.15

11.15

07.40

6 Month

11.40

11.35

07.40

1 Year

11.70

11.65

N.A




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

1 Month

11.90

11.25

09.00

2 Month

11.00

11.10

08.00

3 Month

11.10

11.00

07.70

4 Month

11.25

11.10

07.60

5 Month

11.40

11.35

07.50