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Updated on June 29, 2002

Short term rates were mostly at the higher end of the spectrum for most part of the past week. T-Bill rates continued to ease off in the secondary market. The T-Bill auction of the week provided fuel to the fire that was ragging in the market due to the rumors regarding a cut in the discount rate. Though there were no official words from the State Bank, term rates crashed and activity was witnessed at the lower level.

Overnight trading was witnessed conducted in the range of 4.50% to 6.50%. However, on Wednesday rates reversed and touched 8.50% and 8.90% and stayed stuck at that level till the last day of the fiscal year end. Initially one and two week trades were witnessed in the band of 6.00% and 5.50% but rose later to touch 8.50% and 7.25%, respectively but fell back to 7.50% and 7.00% on the weekend. This sudden hike in the short term was mostly because of the panic created on account of June end. Trading in eight to nine months maturity paper were traded at 6.25% prior to auction set the tone for the participation. A total bid of Rs 27.50 billion was witnessed with State Bank accepting only Rs 10.80 billion and stayed below the target amount of Rs 11 billion. As SBP received no bids in three months, it accepted Rs 10.80 billion in six months at the cut-off yield of 6.43% and rejected all the bids for the twelve month paper. Desperate buying was evident after the announcement of auction result the May 16th 2002 one year T-Bill changed hands as low as 6.50%. Simultaneously rates slid off sharply in term market and three month repo witnessed a fall of around 75 to 100 basis points to settle at 5.40%. The past week also saw all eyes focused on PIBs and the three, five and ten year papers traded aggressively in the market at approximately 100 b.p.s lower that the coupons rates of 9.00%, 10.00% and 11.00%, respectively.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

06.65

06.80

13.00%

2 Year

07.25

07.80

13.50%

3 Year

07.90

08.40

14.00%

4 Year

08.25

09.00

14.25%

5 Year

09.10

09.40

14.50%

10 Year

10.10

10.50

15.00%




AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Jun 26 T-BILL Jun 26 Jun 27
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.11,000 Mln.   Rs.27,585 Mln. Rs.10,850 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

08.90

04.25

13.93

1 Week

08.25

05.00

11.88

1 Month

05.80

05.75

14.00

3 Month

05.30

05.65

12 80

6 Month

05.75

06.05

12.78

1 Year

06.30

06.80

13.00




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

1 Month

06.00

06.00

15.00

2 Month

05.70

05.75

13.00

3 Month

05.30

05.65

12.90

4 Month

05.45

06.85

12.90

5 Month

05.60

06.00

12.80