Pakistan Money Market Review
Updated on July
28,
2001
Activity was conducted amid dry conditions in the
money market. Interbank overnight rates were glued at the 12.95% and
13.00% level while one week activity was also witnessed at levels of
12.00% at the start and end of the week. The market remained short
Monday to Friday but managed to square itself on Saturday. Discounting
ranged between Rs. 7 billion and touched a colossal figure of Rs. 22.80
billion on Friday. The discounting of this magnitude did take the market
by surprise but an even greater surprise came on Saturday on the market
managing to square itself. According to unconfirmed reports on account
of public sector bonds, national savings maturities and reserve
averaging by banks were attributed for the market squaring off.
One month trades were reported in the band of 10.25%
and 10.75% but amounts remained relatively thin. Three and six month
trades were also hard to come by with banks preferring to take their
chances in the Treasury Bill auction. The auction managed to attract a
total amount of Rs. 26.91 billion against the target amount of Rs. 3
billion. The three, six and twelve month T-Bills saw a 66, 99 and 100
basis points reduction in the yields with the new cut-off being 11.46%,
11.60% and 11.99% for the respective papers. A total amount of Rs.
12.055 billion was accepted. The result of this auction did not come as
a major surprise as market players compared it to the returns that were
offered on the 31st May auction, that is when the discount rate stood at
13.00% as it does now. The SBP had reduced it by 100 basis points on the
19th of July. The other development in the primary market was the change
in the status of the Open Market Operations. SBP decided on doing away
with conducting OMOs every other Thursday. As witnessed this Friday,
OMOs would be announced anytime during the week. This Friday, SBP
offered to inject liquidity into the system for a tenor of one week. Rs.
1.10 billion at 10.00% was injected against a total requirement of Rs.
9.07 billion. The injection seemed like a drop in the and a total of Rs.
22.80 billion discounting was reported.
Recent regulatory changes have reflected that the
Central Bank is now concentrating on bringing about further changes in
line with a market based system both in the money and foreign exchange
market. The announcement of the change in the nature of the OMOs, the
past week, seems certainly in the right direction. This would also help
in further controlling the liquidity in the market which in turn can
help the authorities to check the continuous depreciating of the Pak
rupee.
|
Federal Investment Bond |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
|
1 Year |
12.25 |
12.25 |
08.15% |
|
2 Year |
12.75 |
12.75 |
08.50% |
|
3 Year |
13.25 |
13.25 |
08.75% |
|
4 Year |
13.50 |
13.50 |
08.90% |
|
5 Year |
13.75 |
14.00 |
09.00% |
|
10 Year |
14.25 |
14.50 |
09.35% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| July
25 |
T-BILL |
July
25 |
July
26 |
| TARGET AMOUNT |
BID AMOUNT |
ACCEPTED AMOUNT |
| Rs.3,000 Mln. |
Rs.26,911 Mln. |
Rs12,055 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 |
12.90 |
00.88 |
|
1 Week |
12.40 |
12.25 |
06.13 |
|
1 Month |
10.50 |
10.50 |
07.00 |
|
3 Month |
10.95 |
10.55 |
07.10 |
|
6 Month |
11.25 |
11.30 |
07.30 |
|
1 Year |
11.65 |
11.90 |
N.A |
|
|
|
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
1 Month |
11.25 |
11.50 |
07.50 |
|
2 Month |
10.90 |
10.80 |
07.30 |
|
3 Month |
11.10 |
10.75 |
07.25 |
|
4 Month |
11.20 |
10.90 |
07.25 |
|
5 Month |
11.30 |
11.40 |
07.30 |
|
|
