. .



Updated on Oct 20, 2001

The interbank money market was glued at the higher end of the spectrum throughout the past week. The State Bank injected liquidity from time to time but the market continued to experience a crunch that caused banks to approach the repo discount window to meet their requirements. In the primary market the Treasury Bill auction reflected the continued sentiment of expectations of a discount rate cut as banks placed their bids at significantly low levels.

Overnight trading was witnessed between wide bands but the market continued to close at the 11.90% early in the week. SBP did match OMO maturity outflows with fresh injections but there was no marked change in the liquidity status of the market which remained short. It was only after the colossal discounting of Rs. 20.50 billion on Friday that compelled the authorities to announce another OMO for Saturday which did ease of overnight and one week levels. SBP injected Rs. 12.50 billion for one week at 10.00% and the second OMO of the week. Prior to this Rs. 7.30 billion was also injected on the 17th. The overnight market eased and touched a low of 4.00% but closed at 8.00% on Saturday. One week rates which had touched as high as 10.50% prior to the injection later fell into single digits to close in between the band of 9.50% and 9.75%.

Participation in the T-Bill auction was unexpected as SBP managed to attract funds against the six month paper at levels close to the previous three month paper cut-off yield of 10.22%. SBP rejected the single bid for the three month paper and accepted Rs. 500 million and Rs.3.05 billion for the six and twelve month papers, respectively. The cutoffs were brought down to 10.29% and 10.79%, that reflected a reduction of 22 and 12 basis points for the six and twelve month papers, respectively. Brisk trading was witnessed in the term market the past week with heavy amounts being dealt in the three month tenor. Both call and repo trades were conducted at levels in between 10.00% and 10.25%. Trades in the market were conducted both from the auction settlement day and from the 1st of November.

The auction the past week yet again reflected that market players do expect a downward adjustment in the discount rate by at least 50 basis points i.e. down to 11.50% from the current 12.00% level. However no direct indications of such a move were witnessed from the Central Bank.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

11.00

11.00

12.50%

2 Year

11.50

11.50

13.00%

3 Year

12.00

12.00

13.75%

4 Year

12.50

12.50

14.00%

5 Year

12.75

12.75

14.50%

10 Year

13.50

13.50

15.00%

.

 
AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Oct 17 T-BILL Oct 17 Oct 18
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs 6,750 Mln  Rs. 13,350 Mln  Rs.3,550 Mln



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

04 Oct 

3,960 Mln

T-Bill

18 Oct

3,600 Mln




REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

07.00

08.50

12.95

1 Week

09.75

09.25

12.95

1 Month

09.70

09.50

12.15

3 Month

09.90

09.90

11.70

6 Month

10.25

10.25

11.65

1 Year

10.60

10.60

12.50




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

1 Month

10.75

10.50

13.15

2 Month

09.80

09.90

12.20

3 Month

09.90

10.00

12.25

4 Month

10.00

10.10

12.30

5 Month

10.15

10.25

12.35