. .



Updated on Nov 24, 2001

The interbank market was unchanged throughout the past week as banks continued to grapple with the sky high short term rates. The market remained short with the discounting figure at the State Bank ranging between Rs. 3.50 billion and Rs. 14.50 billion. There was no intervention by the central bank, to alleviate the liquidity crunch, that came as a surprise to the market but SBP's staying away might have been linked to the rumour regarding the decrease in the Cash Reserve Requirement (CRR) that was heard in the market towards the week end. This rumour prompted significant activity in the term market that brought rates down by at least 30 basis points in all tenors ranging from one month to six months. Also the past week a total amount of Rs. 5.014 billion of the three and five year Pakistan Investment Bonds were sold in the auction.

Trading for overnight funds was conducted at the 9.90% level throughout the week with banks tapping the repo discount window on a daily basis. It was on Friday that the maximum discounting of Rs. 14.50 billion was reported which was apparent due to banks having to average out their reserve positions for the entire week. One week rates were volatile, initially at 8.75% but later touched a high of 9.25% and even 9.50% as SBP refrained from intervening and injecting liquidity to ease the crunch. One and two month levels also remained firm as banks covered themselves till the 24th of December which would keep them liquid around the time that outflows would occur due to Eid and also covering themselves over the year end. Activity in both these tenors was witnessed at around 8.50% and 8.30% respectively. It was on Saturday that the market turned around on rumours of the possibility of a cut in the CRR. This rumour caused banks to place funds and heavy amounts were traded on the dealing system. Four and five month trades were conducted at levels around 8.20% while later two, three and four month activity was conducted at 8.00%. The PIB auction for the three and five year papers received a healthy response and the authorities managed to sell the target amount of Rs. S billion. In fact the paper was also sold at premium but SBP announced the cut-off at par and breakup amount being Rs. 2.20 and Rs. 2.80 billion for the three and five year paper, respectively.

The money market has remained at the sky high levels since the start of November while the liquidity crunch has worsened since the start of Ramazan.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

09.00

09.25

12.00%

2 Year

09.75

10.00

12.75%

3 Year

10.75

10.75

13.25%

4 Year

11.00

11.00

13.50%

5 Year

11.25

11.25

14.00%

10 Year

12.25

12.25

14.75%

.

 
AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Nov 14 T-BILL Nov 14 Nov 15
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs 16,546 Mln  Rs. 13,250 Mln Rs.8,050 Mln



 
MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

01 Nov

17,650 Mln

T-Bill

15 Nov

14,850 Mln

T-Bill 29 Nov 18,047 Mln



REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

09.90

09.90

12.95

1 Week

08.25

09.00

12.95

1 Month

08.00

08.10

12.00

3 Month

07.80

08.00

11.40

6 Morith

08.00

08.25

11.20

1 Year

08.55

08.75

12.00




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

1 Month

08.40

08.50

13.00

2 Month

08.10

08.30

12.30

3 Month

07.80

08.00

11.75

4 Month

07.90

08.10

11.65

5 Month

07.95

08.30

11.60