In a surprising move the central bank injected about Rs18 billion into the banking system on July 12 after money market ran into shortage of liquidity. Despite this injection, there was also a discounting of Rs11 billion.

The market thus absorbed a total of Rs29 billion in a single day. About Rs18 billion has been injected by the State Bank of Pakistan through reverse repo for one week at a return of 7.25 per cent per annum.

Earlier this week, the central bank had sucked a record Rs69 billion from the money market through the auction of Treasury Bills held on July 10. This was the highest ever amount picked up in a single session and more than triple the pre-auction target of Rs20 billion fixed by the bank.

At the Treasury Bills auction of July 10, Rs70.685 billion worth of bids were offered, of which the central bank accepted Rs68.28 billion; Rs700 million for three months maturity at a cut off yield of 5.8 per cent, Rs34.38 billion for six months maturity at 6.44 per cent, and Rs.34.20 billion for 12 months maturity at 6.99 per cent.

According to the weekly Statement of Position of the scheduled banks for the week ended June 29,2002, the sum of demand and time liabilities maintained the upward trend in the week under review, as both demand and times deposits recorded an increase.

The sum total stood at Rs1,482,557 million, showing a rise of Rs35,291 million over the preceding week’s figure of Rs1,447,266 million. As compared to the total deposits of Rs1,310,001 million in the corresponding period last year, the current week’s deposits were higher by Rs172,556 million.

During the week under review, demand deposits showed an increase of Rs23,571 million, rising to Rs666,624 million over previous week’s Rs643,053 million, and was also higher against last year’s corresponding figure of Rs582,824 million by Rs83,800 million.

Meanwhile, time liabilities grew by Rs11,720 million to Rs815,933 million against preceding week’s Rs804,213 million. Compared to last year’s corresponding figure of Rs727,177 million, the current week’s figure is higher by Rs88,756 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities fell in the current week. At Rs135,557 million it was lower by Rs592 million over preceding week’s Rs136,149 million. Compared to last year’s corresponding figure of Rs139,367 million, the current week’s figure is lower by Rs3,810 million.

Scheduled banks borrowings from banks abroad stood at Rs12,642 million in the current week, as against Rs12,904 million a week ago, showing a fall of Rs262 million. It was also lower by Rs2,527 million over last year’s corresponding figure of Rs15,169 million.

Money at call and short notice in Pakistan declined in the week under review. It stood at Rs32,831 million, showing a fall of Rs1,825 million over preceding week’s Rs34,656 million. When compared to last year’s corresponding figure of Rs31,179 million, the current week’s figure is however, higher by Rs1,652 million.

Scheduled banks advances including bills purchased and discounted, showed an increase in the week under review.

At Rs962,220 million it was larger by Rs12,443 million over preceding week’s figure of Rs949,777 million. Compared to the corresponding figure a year ago, when advances were to the tune of Rs945,651 million, the current week’s advances are higher by Rs16,569 million.

Scheduled banks investment in central government securities, Treasury bills and other approved securities declined in the week under review. Such investments amounted to Rs470,793 million, showing a fall of Rs2,172 million over previous week’s Rs472,965 million. Compared to last year’s corresponding figure of Rs296,934 million, the current week’s investment is higher by Rs173,859 million.

Total assets of scheduled banks showed an increase in the week under review. These rose to Rs2,288,491 million against previous week’s Rs2,236,233 million, showing a rise of Rs52,258 million.

Compared to last year’s corresponding figure of Rs1,983,928 million, it shows a rise of Rs304,563 million.