. .



Updated on May 11, 2002

Volatility persisted in the interbank money market with activity between wide bands. Inflows on account of corporate loan adjustments by the State Bank were reported as well that caused a slight confusion, thereby affecting the levels. There was no discounting reported even with rates touching the 8.90% level on Friday. The PIB auction of the month announced as well and prices quoted of the three and five year issues reflected a much expected sentiment.

Overnight rates of 8.00% and 8.50% early in the week came off and fell to 4.00% while one and two week activity was also reported at levels of 4.00% and 5.00% respectively. This sudden ease in short term was due to the State Bank making payments for loan adjustments of the local utility company, KESC. A net inflow of approximately Rs. 5 billion was reported that saw the overnight crashing and falling to 3.00%. However this inflow also brought some confusion with it and throughout the week rates remained volatile with activity being witnessed at both end i.e. 2.00% and 8.90%. The term market also fell of sharply with lending from certain quarters in the market causing the one month market to fall off about 125 b.p.s. Most of the activity was system generated and one month trades initially at 5.40% were reported a lows of 4.85% as well. The three and six month offers also eased and were available at 5.70% and 6.15% respectively but only temporarily. The ease in term levels did cause the secondary market of T-Bills to pick up significantly and six month and one year papers changed hands at levels of 6.20% and 6.75%, respectively. The State Bank also announced the PIB auction for the month of May with a preauction target amount of Rs. 3 billion. The trading for the five year paper was reported soon after the announcement with prices between a wide band of 102.20 and 102.60.

Interest in the longer dated T-Bills has picked up significantly and we feel that another downward adjustment, though nominal cannot be ruled out in the coming auction. The liquidity in the money market does seems to cause short term rates to remain volatile but any sudden withdrawals will be adjusted by the State Bank's intervention.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

07.10

07.10

12.25%

2 Year

07.70

07.70

12.50%

3 Year

08.40

08.45

12.75%

4 Year

08.40

08.45

12.75%

5 Year

09.50

09.50

13.00%

10 Year

10.50

10.60

13.50%




AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
May 02 T-BILL May 02 May 03
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.22,000 Mln. Rs.44,150 Mln. Rs.33,750 Mln.

  


MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

02 May

22,000 Mln.
T-Bill 16 May 5,200 Mln.

T-Bill

30 May

14,407 Mln.



REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

02.50

07.75

12.90

1 Week

03.25

06.75

12.45

1 Month

05.15

05.75

11.50

3 Month

05.70

05.80

11.25

6 Month

06.20

06.25

11.50

1 Year

06.75

06.70

11.75




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

1 Month

05.65

06.25

12.50

2 Month

05.60

06.10

11.50

3 Month

05.75

05.80

11.15

4 Month

05.95

06.15

11.25

5 Month

06.15

06.25

11.40