. .



Updated on Dec 08, 2001

The interbank market liquidity status remained unchanged with banks approaching the State Bank for respite throughout the week. The authorities tried to provide relief with an OMO injection but the market failed to square off after the activity. Short to medium term rates also moved to the higher side as the FIB maturities fell during the Eid holidays announced by the authorities.

Overnight market glued at the 9.90% only eased off marginally to 9.50% on the day SBP injected liquidity by way of a two week OMO. In fact SBP was willing to provide liquidity to banks for a period of two week, for banks to cover themselves over the Eid period but bids were quoted at levels significantly lower than the offers available in the market for the same period. SBP accepted all bids at 7.35% and higher for the two week injection which yet again left the market short. The repo discount window had to be tapped later in the week and by Friday, reserve averaging caused the highest discounting of Rs. 7.20 billion. One and two week touched highs of 8.50% and 9.00%, respectively and moderate amounts were traded around these levels. The one month rate also rose with banks covering themselves over December 31st. Activity was reported at 8.25% while some at highs of 8.75% as well. Two and three month rates touched 8.25% with deals being conducted along the way from the previous week's level of 8.00% in both the tenors. Significant interest was also evidenced in long dated T-Bills and buyers picked up the 1/11/01 one year paper at yields close to 8.60%. The State Bank also announced the ten year PIB auction settling on the 24th of this month. Against a pre-auction target of Rs. 10 billion, keeping in mind the liquidity problem at this time of the year, forward trades were witnessed at premiums of 50 basis points with initial trades at 100.20.

It seems that the authorities are bent upon bringing down the lending rates offered by commercial banks to their customers. This may not be possible at least in the month of December when OMOs have actually failed to bring about the desired effect and T-Bill and PIB auction also due. However we still feel that ahead of the year end or even before Eid, the State Bank may intervene and provide the much needed liquidity to the banks.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

09.00

08.75

12.25%

2 Year

09.75

09.50

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 28 T-BILL Nov 28 Nov 29
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs 21,256 Mln  Rs. 24,200 Mln Rs.10,200 Mln



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

13 Dec

3,030 Mln

T-Bill

27 Dec 

18,300 Mln




REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

08.00

09.00

12.95

1 Week

08.50

08.75

12.00

1 Month

08.50

08.15

12.35

3 Month

08.05

08.00

11.75

6 Month

08.25

08.10

11.65

1 Year

08.50

08.50

12.25




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

1 Month

08.75

08.40

13.35

2 Month

08.20

08.10

12.50

3 Month

08.05

07.90

12.10

4 Month

08.15

08.00

12.00

5 Month

08.25

08.05

12.00