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Pakistan Money Market Review

Updated on July 21, 2001

The inevitable happened on Thursday, 19th of July when the discount rate was readjusted downward at 13.00% by the SBP. This cut in the discount rate was on the cards after the drop in the yield for T-bills. After the safe crossing of the fiscal year-end, the SBP was under no compulsion for the quarter-end NDA and NFA targets. This discount rate cut, coupled with an OMO and a 3-year and 5-year PIB auction for the week, kept the market fairly active.

Surplus liquidity in the interbank money market kept rates on the lower side of the yield curve with activity ranging in single digits for the overnight to two-week tenors for most of the week. Overnight rates remained unchanged from the previous week till the last day of the current week where funds changed hands in the narrow band of 1.00% and 3.00%. Rates hiked only after the SBP mopped Rs. 17.6 billion from the system in its fortnightly OMO on Thursday. This, coupled with an outflow of Rs. 2.9 billion for the PIB in an auction the very next day, saw rates touch their higher levels and numerous borrowers squared their positions from the SBP discount window. The SBP accepted amounts in the OMO for one, two and four weeks at 9.00%, 9.24% and 9.50%, respectively. PIBs worth Rs.2.9 billion were accepted at a premium price of up to Rs. 100.02.

It seems the SBP may concentrate to lower yields on T-bills so that the export finance for the October - December quarter will be at lower rates. With the US$133 million IMF tranche on its way in the present quarter, the SBP is in a position to guide the market to its desired levels.

Federal Investment Bond

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

12.25

12.65

07.75%

2 Year

12.75

13.00

08.50%

3 Year

13.25

13.40

09.00%

4 Year

13.50

13.60

09.25%

5 Year

14.00

13.90

09.50%

10 Year

14.50

14.50

10.00%

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AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
July 11 T-BILL July 11 July 12
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.1,000 Mln

Rs.25,500 Mln

Rs.6,500 Mln



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

26 July

2,669 Mln




REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

12.90

04.25

10.90

1 Week

12.25

04.25

08.50

1 Month

10.50

08.70

07.35

3 Month

10.55

10.70

06.90

6 Month

11.30

11.40

7.05

1 Year

11.90

12.25

N.A




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

1 Month

11.50

09.70

08.10

2 Month

l0.80

10.25

07.25

3 Month

10.75

10.80

07.20

4 Month

10.90

11.10

07.20

5 Month

11.40

11.40

07.20