State Bank continued the same policy by
intervening through OMO to remove the liquidity shortage which was
mainly due to some traditional outflows. Week started with overnight
activity dealt around 4.00% but after the injection of around Rs.
15.95% by SBP in two weeks at the cut-off yield of 2.00%. Market saw a
sharp fall and overnight rates touched the rock bottom level of 0.25%.
Prior to OMO, one and two weeks activity took place around 3.50% and
2.75%, but later on funds in respected tenors were available around
1.50% and 1.75% against the bids at 0.75% and 1.60%. Banks restricted
themselves to the shorter tenors due to which no major activity was
witnessed in term repo side. However, borrowing interest in three and
six months was available around 1.75% and 1.85% against the offers at