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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