On March 5, the State Bank of Pakistan raised over Rs30 billion from the inter-bank market through the sale of six-month Treasury bills.

The central bank reduced the average yield from around 3.2 to 2.1 per cent. This is the second biggest one time cut in six-month T-bill rate within this fiscal year. There is a huge liquidity in the market, which is visible from the recent auction. While the SBP had set the T-bills sale target at Rs30 billion, the banks came up with total bids worth about Rs104 billion.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended February 22, 2003, both notes in circulation and those issued showed decrease in the week under review. Notes in circulation stood at Rs534,486.423 million against earlier week’s figure of Rs542,385.903 million, showing a fall of Rs7,899.48 million. When compared to the corresponding week a year ago when it was Rs473,625.757 million, the current week’s figure is higher by Rs60,860.660 million.

Total notes issued also recorded a fall in the current week. At Rs534,668.194 million it was lower by Rs7,906.881 million over the figure of Rs542,575.075 million recorded a week earlier. In the corresponding week last year it amounted to Rs473,759.697 million, which shows current week’s figure to be higher by Rs60,908.497 million over last year’s figure.

Approved foreign exchange rose further in the week to Rs478,412.502 million, larger by Rs12,533.484 million over preceding week’s figure of Rs465,879.018 million recorded a week earlier. When compared to the corresponding week a year ago, when the figure was Rs155,794.332 million, the current week’s figure was higher by Rs322,618.17 million.

Balances held outside Pakistan in approved foreign exchange declined further in the week under review. It stood at Rs32,631.629 million over preceding week’s figure of Rs38,672.117 million, showing a decrease of Rs6,040.488 million. Compared to last year’s corresponding figure of Rs71,486.870 million, the current week’s figure is also lower by Rs38,855.241 million.

Loans and advances of scheduled banks to the three sectors - agricultural, industrial and export showed a mixed picture in the week under review. The agricultural sector received Rs55,056.769 million similar to preceding week’s figure. The current week’s figure is lower by Rs659.328 million over last year’s corresponding figure of Rs54,397.441 million.

There was an inflow of Rs2,971.717 million to the industrial sector during the week under review, depicting a decline of Rs5.645 million over previous week’s Rs2,977.362 million. When compared to last year’s corresponding figure of Rs3,673.172 million, the current week’s figure is lower by Rs701.455 million.

The export sector received Rs44,958.197 million against previous week’s figure of Rs45,323.021 million, showing a fall of Rs364.824 million. Current week’s figure was smaller by Rs6,927.431 million over last year’s corresponding figure of Rs51,885.628 million.

According to the weekly statement of position of scheduled banks for the week ended February 22, 2003, the sum of demand and time liabilities showed an increase in the week under review. The sum total stood at Rs1,626,949 million against preceding week’s Rs1,610,294 million, showing a rise of Rs16,655 million. As compared to the total deposits of Rs1,374,545 million in the corresponding period last year, current week’s deposits were higher by Rs252,404 million.

During the week under review demand and time deposits increased. Demand deposits rose to Rs743,586 million, or by Rs8,266 million over previous week’s Rs735,320 million. It was also, higher against last year’s corresponding figure of Rs609.646 million by Rs133,940 million.

In the current week, time deposits were higher over preceding week and against the corresponding week last year. At Rs883,363 million, it was larger by Rs8,389 million over previous week’s Rs874,974 million, and by Rs118,464 million, over last year’s corresponding figure of Rs764,899 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities declined further in the current week. At Rs134,874 million it was smaller by Rs133 million over preceding week’s Rs135,007 million. Compared to last year’s corresponding figure of Rs121,620 million, the current week’s figure is higher by Rs13,254 million.

Scheduled banks borrowings from banks abroad stood at Rs15,441 million in the current week, as against Rs14,484 million a week ago, showing a rise of Rs957 million. It was larger by Rs537 million over last year’s corresponding figure of Rs14,904 million.

Money at call and short notice in Pakistan declined further in the week under review. It stood at Rs22,771 million, a fall of Rs3,779 million over preceding week’s Rs26,550 million. When compared to last year’s corresponding figure of Rs49,864 million, the current figure is lower by Rs27,093 million.