October 3, 2003	Friday	Sha’aban 6, 1424

KARACHI, Oct 2: The State Bank on Thursday bought Rs4.55 billion in an open market operation through the sale of one- and two-week treasury bills.

The bank received bids worth Rs11.30 billion for one-, two- and four-week T-bills, the bank said in a statement.

It accepted offers worth Rs4.55 billion of one- and two-week T-bills at an annual yield of 0.89 and 1 per cent respectively, it added.

The central bank rejected all bids, worth Rs3 billion, for four-week T-bills. It also rejected bids worth Rs3.75 billion of two-week T-bills.

In the last OMO on September 29, the central bank bought Rs21 billion through the sale of one-week T-bills.

Dealers said overnight money market rates rose after the OMO, which suggested that the market was tightening slightly.

“The central bank mopped up a very small amount, but still the OMO has stabilized overnight rates,” a banker at a state-run bank said.

Overnight rates closed at 3.25 per cent after trading as high as 3.50 per cent earlier in the day from Wednesday’s close of 2.25 per cent.

Another dealer said increased borrowing by banks to meet the central bank’s weekly cash reserve requirement of five per cent had also helped overnight rates.

Pakistani banks are required to meet the central bank’s weekly cash reserve requirement of five per cent ahead of the weekend.—Reuters