October 27, 2003	Monday	Sha’aban 30, 1424

On October 24, the State Bank of Pakistan pumped Rs3.5 billion into the banking system, to keep banks liquid ahead of Ramazan. The money was injected through one week reverse repo of the Treasury bills at 2.10 per cent at an open market operation conducted for this purpose.

If the SBP had not injected this extra cash into the banking system, the banks that had run short of cash because of pre- Ramazan withdrawals would have to borrow money from the SBP discount window at a high rate of 7.5 per cent.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended October 18, 2003, both notes in circulation and those issued increased further in the week under review. Notes in circulation stood at Rs557,156.091 million against earlier week’s figure of Rs550,917.836 million, showing a rise of Rs6,238.255 million. When compared to the corresponding week a year ago when it was Rs471,149.839 million, the current week’s figure is higher by Rs86,006.252 million.

Total notes issued also recorded a rise in the current week. At Rs557,256.998 million it was larger by Rs6,187.264 million over the figure of Rs551,069.734 million recorded a week earlier. In the corresponding week last year it amounted to Rs471,254.163 million, which shows current week’s figure to be higher by Rs86,002.835 million over last year’s figure.

Approved foreign exchange also increased in the week, rising to Rs480,630.162 million, or by Rs16,666.203 million over the preceding week’s figure of Rs463,963.959 million. When compared to the corresponding week a year ago, when the figure was Rs338,448.523 million, the current week’s figure was higher by Rs142,181.639 million.

Balances held outside Pakistan in approved foreign exchange showed a further increase in the week under review. It stood at Rs109,267.411 million over preceding week’s figure of Rs127,207.877 million, showing a fall of Rs17,940.466 million. Compared to last year’s corresponding figure of Rs47,698.470 million, the current week’s figure is substantially higher by Rs61,568.941 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 Rs54,947.895 million against the preceding week’s figure of Rs54,747.895 million, showing a rise of Rs200 million. The current week’s figure is larger by Rs892.869 million over last year’s corresponding figure of Rs53,855.026 million. There was an inflow of Rs2,695.021 million to the industrial sector during the week under review, depicting a decline of Rs0.196 million over the previous week’s Rs2,695.217 million. When compared to last year’s corresponding figure of Rs3,269.107 million, the current week’s figure is lower by Rs574.086 million.

The export sector received Rs66,992.022 million against the previous week’s figure of Rs65,888.895 million, showing a rise of Rs1,103.127 million. Current week’s figure was larger by Rs17,819.699 million over the last year’s corresponding figure of Rs49,172.323 million.

According to the weekly statement of position of scheduled banks for the week ended October 11, 2003, the sum of demand and time liabilities increased in the week under review. The sum total stood at Rs1,800,303 million against the preceding week’s Rs1,799,623 million, showing a rise of Rs680 million. As compared to the total deposits of Rs1,534,748 million in the corresponding period last year, current week’s deposits were higher by Rs265,555 million.

During the week under review while demand deposits rose, time deposits declined. Demand deposits increased to Rs874,717 million, a rise of Rs3,272 million over previous week’s Rs871,445 million. It was also higher against last year’s corresponding figure of Rs668,189 million by Rs206,528 million.

In the current week, time deposits declined over the preceding week’s figure. At Rs925,586 million, it was smaller by Rs2,592 million over previous week’s Rs928,178 million but higher by Rs59,027 million, over last year’s corresponding figure of Rs866,559 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities increased in the current week. At Rs142,487 million it was larger by Rs2,713 million over preceding week’s Rs139,774 million. Compared to last year’s corresponding figure of Rs131,718 million, the current week’s figure is higher by Rs10,769 million.