Rates remained on the higher side throughout the week
and funds in overnight changed hands mostly in the band of 8.50% to
8.90%. Market saw sharp decline in rates after the T-bill auction, where
State Bank of Pakistan (SBP) accepted a meager amount of Rs.8.73 billion
against the heavy maturity of Rs.70 billion. This ease was temporary and
later overnight trades were witnessed just below the discount rate at
SBP also exercised 2 OMOs for 14 and 13 days mopping
up a total of Rs.33.0 billion for 7.85% and 7.80%, respectively.
One-week tenor started on a high note, quoted at
8.00% and 8.40% but later slipped down to 7.25% and 7.75% and finally
closing at 7.75% and 8.25% at the end of the week. Two-week tenor
started at 8.00% and 8.40% and later rested at 7.85% and 8.15% for the
One-month tenor similarly started quotes at 8.10% and
8.30% and later came down to the level were it was quoted at 7.90% and
T-bill auction was held by SBP for three, six and
twelve month tenors. The targeted amount by SBP was Rs.50.0 billion for
all the tenors, but it accepted bids worth Rs.8.735 billion collectively
in all tenors. The cutoffs of the three tenors remained unchanged -
three-month at 8.1000%, six-month at 8.1388% and twelve-month at
8.7907%. SBP did not change the cutoffs due to the controlled
inflationary pressure in the month of August with CPI at 8.41%
year-on-year (Y-o-Y) as compared to previous month's 8.99% Y-o-Y.
With no major inflow in the system in the week to
come rates are likely to remain at the higher side.