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 |
|
|
