. .



Updated on Feb 09, 2002

The interbank market was jolted the past week with the State Bank of Pakistan sweeping up the entire amount in the Treasury Bill auction, causing overnight rate to touch the 9.00% level. The market was left dry and short by a maximum of Rs. 22.70 billion on Friday. Term rates also shot up significantly with some panicked traders hurriedly covering their short positions.

The pre-auction sentiment reflected term trades at levels 150-200 basis points lower than the T-Bill cut-off yields in the previous auction on the 24th of January. Three and six month activity was witnessed at lows of 4.20% and 5.00%, respectively and the participation in the auction this week reflected that banks were quite convinced that the authorities were bent upon reducing yields significantly. Against a maturity and pre-auction target of Rs. 4 billion, SBP accepted all the bids that totalled Rs. 25.41 billion. However, besides the slightly increase of 12 bps in the yield on the one year paper, the cut-off on the three and six month papers were reduced by 36 and 11 bps respectively. Panic and shock prevailed in the interbank market after the announcement causing some banks to cover themselves for one month as high as 7.25%, the rate which did fall back later. Trading was also reported in the latest three month paper with some banks taking a capital loss and off loading the three month papers. Towards the end of the week term rates eased of with lenders willing at 7.00%, 6.20% and 6.60% in the one, three and six month tenors respectively. One of the reasons for this slight ease has been that chances of an injection by way of an OMO seem bright.

The T-Bill auction did bring some relief to the interbank market as rates stabilized. Furthermore the authorities are also keeping in mind that banks had started to adjust their deposit rates aggressively and some stability needed to be brought on that front. However, we feel that this auction is certainly not a reverse trend and rates both in the primary and the secondary market are set to fall once again as the liquidity position improves.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

.

THIS WEEK

1 WEEK AGO

1 YEAR AGO

1 Year

07.60

06.50

11.75%

2 Year

08.70

07.50

12.60%

3 Year

09.75

08.25

13.00%

4 Year

10.00

08.75

13.00%

5 Year

11.00

09.25

13.25%

10 Year

12.25

10.75

13.50%

.

 
AUCTIONS
BID DATE INSTRUMENT RESULT SETTLEMENT
Feb 06 T-BILL Feb 06 Feb 07
TARGET AMOUNT BID AMOUNT ACCEPTED AMOUNT
Rs.3,997.796 Mln. Rs.25,412.3 Mln. Rs.25,412.3 Mln



MATURITIES

INSTRUMENT

DATE

AMOUNT

T-Bill

07 Feb 

2,198 Mln

T-Bill

21 Feb 

10,250 Mln



REPO RATES

 

THIS WEEK

1 WEEK AGO

1 YEAR AGO

Overnight

08.90

04.50

07.00

1 Week

08.40

04.75

05.00

1 Month

07.00

04.75

08.75

3 Month

06.05

04.40

10.80

6 Month

06.40

05.50

11.10

1 Year

06.75

06.05

11.75




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

1 Month

07.50

04.90

09.75

2 Month

06.50

04.50

10.90

3 Month

06.10

04.60

11.00

4 Month

06.20

04.80

11.10

5 Month

06.30

05.20

11.20