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Pakistan Money Market Review

Updated on Jan 22, 2001

The trend in the interbank money market changed slightly with the past week with short term rates easing off and falling into single digits. OMO maturities from the previous week with reserve averaging early in the week further brought overnight rates under pressure. Overnight fell to as low as 5.00% during the week with one week trades also witnessed at around 9.50%. However it was on Saturday that rates rose sharply with overnight activity initially at 8.00% but soon jumping into double digit levels with trades as high as 12.00%. This upward trend can be attributed to the gradual draining of liquidity due to the foreign exchange swap maturities from the interbank market.

Brisk activity continued to be witnessed in the term market with majority of the activity in the call market. Three month trades were witnessed as high as 14.50% while six month tenors traded as high as 14.80%. However rates nose dived on Friday with bids initially being squared at 14.25% and later activity being also reported at 13.75%. Meanwhile the one month repo and call offers fell to 11.00% and 12.75% respectively with trades being reported in both at 11.25% and 12.75%, respectively. Trades were also conducted for T-Bills maturing in May while 5 yr. FIBs maturing April were also traded in between the band of 12.10% and 12.40%. Interest in PIB was prevalent in the market with buyers willing to bid as high as 100.65 for the 30th December 10 Yr. issue. Offers were available at 101.00 but fell off to around 100.75 on Saturday. The rise in the PIB prices was generally due to slight ease in the interbank market and because of buying interest from the corporate sector. However we feel that the prices of PIB will certainly fall and settle at around the 100.50 level. The announcement of the two-way OMO did cause the banks to participate on both sides with approximately Rs. 10 billion for borrowing while Rs. 8 billion for lending to SBP.

The FIB maturity next week may ease of the effect of the outflow still expected due to the foreign exchange swaps, while a T-Bill maturity to the tune of Rs. 6.60 billion is also expected on the 25th. We feel that significant participation would be witnessed in the T-Bill auction next week keeping in mind that banks were also witnessed bidding for the outright paper in the OMO on Thursday. However with tenor rates still firm any major participation at previous levels would be a distant possibility.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

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THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

12.25

12.50

07.75%

2 Year

12.80

12.75

10.50%

3 Year

13.10

13.00

11.00%

4 Year

13.50

13.25

11.00%

5 Year

13.75

13.75

11.75%

10 Year

14.50

14.50

12.50%

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AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Jan 10 T-BILL Jan 10 Jan 11
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.8.930 Bln.

Rs.2.750 Bln.

Rejected



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

11 Jan

8,450 Mln

T-Bill

25 Jan

6,600 Mln




REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

10.00

12.00

07.50

1 Week

11.00

12.00

08.00

1 Month

11.25

12.00

07.80

3 Month

12.00

11.05

07.90

6 Month

12.15

12.20

08.30

1 Year

12.30

12.15

N.A.

 



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

1 Month

12.25

13.00

07.90

2 Month

11.75

11.90

08.05

3 Month

12.00

11.95

08.10

4 Month

11.90

11.90

08.20

5 Month

12.00

11.85

08.25