Pakistan Money Market Review
Updated on Feb 12,
2001
The interbank market remained at the lower end of the
spectrum throughout most of the past week. OMO and T-Bill maturities
coupled with news of commodity inflows were attributed to the presence
of the excess liquidity in the market. Unexpected borrowing from certain
quarters in the market did cause overnight to jump up and cross into
double digit levels on Thursday. However, this trend was short lived and
rates fell back on Friday and Saturday with overnight funds changing
hands between 1.50% and 2.50%. In fact after the rise in levels it was
one week trading in the market that caused rates to come under further
pressure. Initial activity was reported at levels of 7.00% and 750%
while later lenders placed their funds at levels as low as 5.50% as
well.
The term market saw marginal activity with
concentration mostly in the longer tenors of three and six months. The
T-Bill auction the past week did initially keep rates at levels
witnessed in the previous week. Three and six month bids and offers were
present in between 10.85% and 11.25% but trades were scarce. However, it
was the participation and the auction result that did cause some traders
to take a view. Three month trades were conducted at 11.00% while six
month activity was also reported at 11.25%. However the liquidity in the
market did cause lenders to take a view on the call front and three
month deals were witnessed in between 12.75% and 13.00% with trades in
forward dates as well. The pre-auction target amount for the T-Bill
auction did cause some dealers in the market to be surprised. However,
the market not only digested the target amount at previous cut-off
levels but the central SBP managed to sell an additional Rs. 2.847
billion, thereby accepting an aggregate amount of Rs. 2.997 billion
10.50%, 10.96% and 11.48% for the 3, 6 and 12 month papers,
respectively.
The glut of liquidity in the interbank market seems to continue to
put pressure on rates not only in the short term market but also on
longer tenors which in turn makes SBP manage rates on its debt
instruments comfortably. Furthermore, the Pakistan Investment Bond
auction scheduled for next week will certainly cause the entire target
amount of Rs. 8 billion to be accepted, keeping in mind the trading that
has already taken place from the settlement date.
| YIELD PROFILE |
FEDERAL INVESTMENT BONDS |
| . |
THIS
WEEK |
1
WEEK AGO |
1
YEAR AGO |
|
1 Year |
11.50 |
11.80 |
10.00% |
|
2 Year |
12.00 |
12.60 |
10.75% |
|
3 Year |
12.60 |
13.00 |
11.50% |
|
4 Year |
12.60 |
13.00 |
11.75% |
|
5 Year |
12.80 |
13.25 |
12.00% |
|
10 Year |
13.00 |
13.50 |
12.75% |
| AUCTIONS |
| BID
DATE |
INSTRUMENT |
RESULT |
SETTLEMENT |
| Feb
08 |
T-BILL |
Feb
08 |
Feb
09 |
| TARGET AMOUNT |
BID
AMOUNT |
ACCEPTED AMOUNT |
| Rs.150
Mln. |
Rs.4.497 Bln. |
2.997
Bln |
|
|
| MATURITIES |
INSTRUMENT |
DATE |
AMOUNT |
|
T-Bill |
08 Feb |
150 Mln |
|
T-Bill |
22
Feb |
1250 Mln |
|
|
|
REPO RATES |
|
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
Overnight |
02.00 |
04.50 |
06.25 |
|
1 Week |
04.50 |
05.50 |
08.25 |
|
1 Month |
08.40 |
08.75 |
08.50 |
|
3 Month |
10.60 |
10.75 |
08.00 |
|
6 Month |
10.95 |
11.54 |
08.50 |
|
1 Year |
11.60 |
11.80 |
N. A. |
|
|
|
| TREASURY
BILL RATES |
| MATURING |
THIS WEEK |
1 WEEK AGO |
1 YEAR AGO |
|
1 Month |
09.40 |
09.75 |
09.25 |
|
2 Month |
10.50 |
11.00 |
08.50 |
|
3 Month |
10.80 |
11.10 |
08.25 |
|
4 Month |
10.90 |
11.20 |
08.40 |
|
5 Month |
11.00 |
11.40 |
08.50 |
|
|
