. .



Updated on Sep 29, 2001

The money market passed through a peaceful quarter end. Three OMOs were the highlight of the week as SBP injected liquidity into the system to ease of the shortage that had touched a high of Rs. 10.50 billion. There were no rumours of the discount window being closed this quarter end and in fact the market managed to square itself at end. However rumours of a cut in the discount rate were ripe again but no such change was reported.

The overnight market was volatile throughout the past week with trades between wide bands of 2.00% and 11.90%. Timely injection on the 25th and the 27th to the tune of Rs. 10.50 billion and 5.25 billion, respectively, kept rates towards the lower end of the spectrum. These injection at rates of 11.00% and 10.25% were only for a period of one week and witnessed for the first time around a quarter end. It was only on 28th September 2000, that SBP did invite bids but only mopped up funds rather than injected. It was on the last day of this quarter end that SBP announced another OMO, the third of the week in order to mop up funds. Even though the market was significantly long, banks did not reflect any significant interest in entering into reverse-repo transactions with the SBP for one, two or four weeks. This reaction to place funds with SBP did not come as a surprise, as majority of the market players had only picked up funds in the OMO that they would be paying back on the 2nd and the 4th of October. Injection in the OMO caused the one week market rates to fall from per-OMO double digit levels to as low as 6.00%. Borrowing was witnessed at levels starting from as high as 9.00% as banks took the opportunity to cover themselves further. The term market also eased off considerably with most trades conducted in the one month tenor as low as 8.75%. One month levels jumped back up on Saturday with trades in between 9.00% and 9.50% while three month repo activity was also reported at close to 9.80%.

Even with the discount rate rumors being dispelled by the State Bank, it did bring down the export refinance rate, which could also signal a further ease in the yields on T-Bill. The ease in the Rupee parity at the quarter end has probably been a sigh of relief for the money managers of the country at a time when chances of war linger on the western borders of the country. Furthermore with international financial assistance also coming along for Pakistan, with no strings attached, we feel that the authorities might actually bring about a downward adjustment in the discount rate.

Federal Investment Bond

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

11.00

11.00

l0.50%

2 Year

11.50

11.50

11.00%

3 Year

12.00

12.00

11.75%

4 Year

12.25

12.25

12.00%

5 Year

12.50

12.50

12.25%

10 Year

13.00

13.00

13.00%

 


 

AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Sep 19 T-BILL Sep 19 Sep 20
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs 10,590 Mln

Rs 6,830.8 Mln

  Rs 1,230.8 Mln

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

06 Sep

8,407 Mln

T-Bill

20 Sep

4,811 Mln

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

11.90

11.90

12.00

1 Week

10.00

11.00

11.70

1 Month

09.50

10.50

09.75

3 Month

09.75

10.15

09.65

6 Month

09.95

10.45

10.00

1 Year

10.10

10.70

10.10

 


 

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

1 Month

10.50

11.50

10.75

2 Month

10.00

10.35

10.20

3 Month

10.10

10.15

10.25

4 Month

10.20

10.25

10.25

5 Month

10.30

10.35

10.35