. .
A



Updated on June 01, 2002

The interbank money market went through a volatile phase the past week and activity was witnessed between the wide bands of 2.00% to 8.90%. Week started with the banks approaching SBP for respite, due to which State Bank of Pakistan conducted OMO to provide relief to the interbank money market by injecting liquidity early in the week. Rates eased off in the short term as well as in long term. The market came under pressure after the auction of the week in which SBP accepted total amount of Rs.9.30 billion.

The overnight rate at 8.90% and the market short by Rs.4.50 billion, the Central Bank provided relief by injecting Rs.17.20 billion in the system in one and two weeks at the cut-off yield of 6.50% and 6.55%, this heavy injection caused a sudden ease in the rates and overnight rates crashed and slided down to 2.00%. The term market also fell of sharply and one, two week trades were executed at 5.50%, and 6.00%. One-month rates saw sharp fall of around 60 to 70 b.p.s and deals were struck around 6.00%. The term rates bounced back after the T-bill auction in which State Bank mopped up Rs.9.30 billion and also because of the outflows of around Rs.7.20 billion on account of corporate payments. Due to the total outflow of around Rs.16.50 billion from the system the term rates jumped back to higher side and offers for one and two weeks were quoted in the band of 7.00% and 6.75%. Rates in one month saw a hike as its maturity fall after the quarter closing. Trades in three months were witnessed in the band of 6.10% and 6.15%; some borrowers were keen to borrow in six months call due to which trades in six months call was seen around 7.50%.

This week SBP conducted its T-bill auction in which total participation of around Rs.14.650 billion was seen. against the pre-auction target of Rs.12.00 billion. State Bank accepted the total amount of Rs.9.30 billion and maintained the cut-off yield of the designated papers. Major participation was seen in three month which shows the sentiments of the market that they don't want to invest in the longer tenor only because of the prevailing tension on the border and war like situation. Banks holding one year T-bill are ready to book capital loss by off-loading them above the prevailing cut-offs, but no major deals were seen due to the unavailability of buying interest in the long term papers.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

07.25

07.10

12.25%

2 Year

08.25

08.00

12.50%

3 Year

08.75

08.70

12.75%

4 Year

09.00

09.00

12.75%

5 Year

09.75

09.75

13.00%

10 Year

10.70

10.75

13.50%




AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
May 29 T-BILL May 29 May 30
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.12,000 Mln. Rs.14,650 Mln. Rs.9,300 Mln.

  


MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

13 Jun

7,850 Mln.
T-Bill 27 Jun 9,350 Mln



REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

08.00

08.90

10.50

1 Week

07.40

08.25

09.50

1 Month

06.50

07.00

10.90

3 Month

06.30

06.15

11.15

6 Month

06.60

06.55

11.40

1 Year

07.00

06.90

11.65




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

1 Month

07.00

07.75

11.90

2 Month

06.80

06.75

11.00

3 Month

06.40

06.25

11.10

4 Month

06.50

06.40

11.20

5 Month

06.60

06.50

11.40