. .



Updated on Apr 06, 2002

Interest rates in the money market remained at the higher end with the State Bank repo discount window being approached throughout the week. Term rates also rose sharply resulting in thin participation in the T-Bill auction. However the State Bank maintained yields at previous cut-off levels amid rumors of an upward adjustment.

The liquidity crunch prevailing in the market was primarily due to the outflows witnessed at the end of the financial quarter end i.e. on 31st March. Overnight activity was between narrow bands of 8.00% and 8.90% but close of each day was at the 8.90% level. With the auction this week the one and two week levels also jumped up sharply and touched highs of 8.00% and 7.25% respectively. However these levels came off amid the auction result and two week activity was witnessed as low as 5.75% as well, only to rise back and touch 6.50%. This upward drive was seen after the Rs. 14.57 billion on Friday. The three month tenor rate was in the band of 5.90% and 6.20% with amounts being traded between these levels. This also caused participation at relatively high levels for the three and six month T-Bills in the auction. A total participation of Rs. 11.90 billion was witnessed with only Rs. 3.85 billion at the previous cut-off levels of 6.48% and 7.01% for the six month and one year papers. The State Bank maintained the yields thereby dispelling all rumors of any upward movement of yields on its papers.

No discounting was witnessed at the State Bank on Saturday as banks averaged out their reserves. However we feel that the market will be squaring off in the coming days and any intervention by way of an OMO seems unlikely.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

07.10

07.10

12.00%

2 Year

07.75

07.75

12.50%

3 Year

08.65

08.65

12.75%

4 Year

08.65

08.65

12.75%

5 Year

09.65

09.65

13.25%

10 Year

10.75

10.75

13.50%




AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
April 03 T-BILL April 03 April 04
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.8,000 Mln. Rs.11,900 Mln. Rs.3,850 Mln.



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

04 April

6,450 Mln.

T-Bill

18 April

7,300 Mln.



REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

08.80

08.25

12.25

1 Week

07.50

06.75

08.00

1 Month

06.50

06.00

09.75

3 Month

06.00

05.90

10.70

6 Month

06.35

06.35

11.35

1 Year

06.80

06.75

12.00




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

1 Month

06.70

06.40

10.75

2 Month

06.20

06.20

10.50

3 Month

06.10

05.90

10.75

4 Month

06.25

06.10

10.90

5 Month

06.35

06.35

11.30