On September 17, the cut-off yields on six-month Treasury bills rose to 1.65 per cent from 1.27 per cent to sell Rs14.5 billion worth of the TBs. This seems to signal that the State Bank of Pakistan wants to stabilize the yields to help banks keep their interest income from falling.

Meanwhile, the government aims to raise Rs50 billion through long term Pakistan Investment Bonds in the next quarter to drain out excess liquidity from the market and stabilize the interest rates. The State Bank is to sell these bonds in three instalments; the PIBs Rs15 billion in November and Rs10 billion in December. The coupon rates on the PIBs have been lowered by one percentage point in each case, to 6 per cent for three years, 7 per cent for five years and 8 per cent for 10 years.

According to the weekly statement of position of scheduled banks for the week ended September 6, 2003, the sum of demand and time liabilities continued to increase in the week under review.

The sum total stood at Rs1,789,496 million against the preceding week’s Rs1,788,195 million, showing a rise of Rs1,301 million. As compared to the total deposits of Rs1,524,287 million in the corresponding period last year, the current week’s deposits were higher by Rs265,209 million.

During the week under review demand deposits fell, while time deposits rose. Demand deposits declined to Rs857,601 million, a fall of Rs316 million over the previous week’s Rs857,917 million. It was however, higher against the last year’s corresponding figure of Rs675,185 million by Rs182,418 million.

In the current week, time deposits increased over the preceding week’s figure. At Rs931,895 million, it was larger by Rs1,617 million over the previous week’s Rs930,278 million and by Rs82,791 million, over the last year’s corresponding figure of Rs849,104 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities increased in the current week. At Rs125,595 million it was larger by Rs9,085 million over preceding week’s Rs116,510 million. Compared to last year’s corresponding figure of Rs118,680 million, the current week’s figure is higher by Rs6,915 million.

Scheduled banks borrowings from banks abroad stood at Rs20,152 million in the current week, as against Rs19,871 million a week ago, showing a rise of Rs281 million. It was also larger by Rs5,801 million over last year’s corresponding figure of Rs14,351 million.

Money at call and short notice in Pakistan decreased in the week under review. It stood at Rs19,044 million, a fall of Rs3,229 million over preceding week’s Rs22,273 million. When compared to last year’s corresponding figure of Rs38,916 million, the current figure is lower by Rs19,872 million.

Scheduled banks advances including bills purchased and discounted decreased further in the week under review. At Rs1,038,842 million it was smaller by Rs4,736 million over preceding week’s Rs1,043,578 million. Compared to the corresponding figure a year ago, when advances were to the tune of Rs932,192 million, the current week’s advances are higher by Rs106,650 million.

Scheduled banks investment in central government securities, Treasury bills and other approved securities declined in the current week when compared to preceding week’s level. Such investments amounted to Rs771,579 million, a fall of Rs10,139 million over previous week’s Rs781,718 million. Compared to last year’s corresponding figure of Rs569,095 million, the current week’s investment is higher by Rs202,484 million.

Total assets of scheduled banks increased in the week under review. These stood at Rs2,544,851 million against previous week’s Rs2,540,218 million, a rise of Rs4,633 million. Compared to last year’s corresponding figure of Rs2,377,211 million it shows a rise of Rs167,640 million.