FINEX WEEK

 

 

By SHABBIR H. KAZMI
Updated Sep 21, 2002

 

The past week interbank market started with excess liquidity in the system, with deals initially executing at the rock bottom levels of 1.00% and 1.50%. The significance of this week was that State Bank conducted two OMO's to stabilize the market by sucking surplus liquidity from the system. In the first OMO Central Bank mopped-up around Rs. 9.80 billion in four weeks at the cut off yield of 5.70%,

but this outflow was not ample to have an effect on the rates due to which at the same rates SBP accepted Rs. 7.10 billion in four weeks in its second OMO. After the total outflow of around Rs. 17.00 billion from the market rates comparatively hiked up and activity in overnight took place in the band of 3.50% and 4.00%. It was on Thursday, the day of T-bill auction settlement that rates took a U-turn and hiked across the board. After the T-bill auction in which SBP accepted Rs. 27.150 billion, funds in overnight changed hand just below the discount rate at 8.95% and banks had to approached SBP for respite due to which discounting of around Rs. 2.80 billion was reported.

In term repo side volatility was witnessed primarily as deals in one and two weeks were struck around 3.50% and 4.00% but after the T-bill auction activity in the respected tenor was witnessed as high as 7.00% and 6.50%. One month after changing hands around 5.50% witnessed a hike of around 70 to 75 basis points. No major activity in long term was observed and some stray deals in three months were seen at around 5.75%. Bids and offers for six months were in the band of 5.90% and 6.20%. This week State Bank conducted its T-bill auction and heavy participation of Rs. 74.80 billion took place against the targeted amount of Rs. 16.00 billion.

In response of this aggressive participation Central Bank accepted Rs. 27.150 billion in six months at the cut-off yield of 6.3946% and rejected rest of the bids. Aggressive buying was evident in longer tenors T-bills and trades in latest one year was struck at 6.45% and bid and offers for near eight months to maturity paper was quoted in the band of 6.25% and 6.15%.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

06.50

06.65

11.00%

2 Year

07.00

07.20

11.50%

3 Year

07.25

07.50

12.00%

4 Year

08.00

08.00

12.00%

5 Year

08.30

08.28

12.50%

10 Year

09.35

09.45

13.00%

 


 

AUCTIONS

BID DATE

INSTRUMENT

RESULT

SETTLEMENT

Sep 18 T-BILL Sep 18 Sep 19

TARGET AMOUNT

BID AMOUNT

ACCEPTED AMOUNT

Rs.16,000 Mln  

Rs.74,975 Mln

Rs.27,150 Mln 

 


 

MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

05 Sep

5,800 Mln.

T-Bill

19 Sep

16,181 Mln.

 


 

REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

08.25

01.00

11.90

1 Week

07.38

02.75

10.75

1 Month

06.13

04.80

10.50

3 Month

05.88

05.60

10.20

6 Month

05.98

05.90

10.50

1 Year

06.50

06.40

10.70

 


 

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

1 Month

06.65

05.10

11.50

2 Month

06.10

05.40

10.35

3 Month

06.00

05.60

10.20

4 Month

06.00

05.75

10.30

5 Month

06.05

05.85

10.40