23 March 2004	Tuesday	01 Safar 1425

KARACHI, March 22: The State Bank on Monday siphoned off Rs5.1 billion from a fairly liquid inter-bank money market for up to four weeks at an open market operation called for this purpose.

The central bank drained out Rs1.15 billion from the market through two-week repo of treasury bills at 1.09 per cent and Rs3.65 billion through four-week repo at 1.15 per cent. The OMO had generated Rs12.4 billion offers of which the SBP accepted Rs5.1 billion only and rejected the rest.

Repo sale of T-bills by the State Bank means that the central bank would repurchase the bills sold to the banks after the repo tenure is over. In other words Rs1.5 billion liquidity siphoned off from the money market on Monday would flow back into the system after two backs and Rs3.65 billion after four weeks.

The central bank has sucked in Rs5.1 billion through TBs repo to lower the level of liquidity available within the banking system.