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 |
|
|
