Pakistan Money Market Review
Updated on Aug 04,
2001
The interbank money market moved between wide bands
amid inflows in the later half of the week. Even with the market
squaring off early in the week, the overnight rate remained glued at the
12.90% level. Uncertainly in the market regarding liquidity also caused
the one-week level to remain above 12.00%. The market eased off and
caused overnight rates to fall as low as 3.00% only after the Rs. 6.0
billion OMO maturity on 2nd August. In the absence of a fresh OMO,
against expectations, the one and two week repo market also fell sharply
with activity in the band of 6.75% and 9.00%. However, trades at the
lower end of the spectrum in the one week tenor were only witnessed on
the weekend.
The absence of the OMO this week did somewhat come as
a surprise, keeping in mind that the market was fairly long even prior
to the maturities in the market. The one month repo rate did ease off
and fall into single digit levels from the bid and offer of 10.20% and
10.50% early in the week. Rates fell to as low as 8.90% with amounts
trading mostly in between 8.75% and 9.35%. However announcement of the
10 year Pakistan Investment Bond auction, scheduled for the 15th and
settlement on the 16th of this month, kept rates from falling further
and bids and offers were available at 8.75% and 9.00% on the weekend.
The pre-auction target of Rs. 10 billion also kept rates firm in the two
month tenor, the maturity of which falls in the next quarter with
nominal activity conducted in between the range of 9.75% and 10.20%.
Heavy activity was witnessed for outright T-Bills. The pressure was
evident on the buying side with buyers, upon seeing rep levels easing
picked 6 months T-Bills initially at 11.25% and later at 10.90% as well.
However, papers maturing in January 2002 were traded above the 11.00%
level.
Trading in outright T-Bills witnessed this week
certainly reflects significant interest in the forthcoming T-Bills
auction. We feel that participation would be concentrated for the
six-month paper while a downward adjustment in the yield on the
three-month paper is likely. As far as the PIB auction, ten days away
from now, is concerned, buyers will certainly be willing to buy the
paper at slight premiums while majority bids are expected at par.
|
Federal Investment Bond |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
|
1 Year |
12.00 |
12.25 |
08.15% |
|
2 Year |
12.50 |
12.75 |
08.50% |
|
3 Year |
13.00 |
13.25 |
08.75% |
|
4 Year |
13.25 |
13.50 |
08.90% |
|
5 Year |
13.50 |
14.00 |
09.00% |
|
10 Year |
14.00 |
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 |
09 Aug. |
7,352 Mln |
|
T-Bill |
23 Aug. |
5,652 Mln |
|
|
|
REPO RATES |
|
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
Overnight |
04.00 |
12.90 |
10.95 |
|
1 Week |
06.50 |
12.40 |
09.00 |
|
1 Month |
09.00 |
10.50 |
08.13 |
|
3 Month |
10.20 |
10.95 |
07.38 |
|
6 Month |
11.00 |
11.25 |
07.48 |
|
1 Year |
11.50 |
11.65 |
N.A |
|
|
|
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
1 Month |
09.75 |
11.25 |
08.80 |
|
2 Month |
10.40 |
10.90 |
07.70 |
|
3 Month |
10.50 |
11.10 |
07.60 |
|
4 Month |
10.70 |
11.20 |
07.55 |
|
5 Month |
10.90 |
11.30 |
07.50 |
|
|
