12 July 2004	Monday	23 Jamadi-ul-Awwal 1425

The State Bank of Pakistan (SBP) has left its discount rate unchanged at 7.5 per cent since November 2002. The dependence of the banks on the central bank as the lender of last resort has gradually reduced.

Now they have the opportunity to borrow overnight funds at much cheaper rates. On July 7, the SBP raised the cut-off yield on three-month and one-year Treasury bills by 30 and 45 basis points, respectively.

The Bank sold Rs64.95 billion three-month bills at a cut-off yield of 2.05 per cent up from the last 1.75 per cent in May. It also sold Rs.550 million one-year bills at about 2.70 per cent up from 2.25 per cent in May. In total, the Bank sold Rs65.5 billion Treasury bills against the target of Rs60 billion.

According to the Statement of Affairs of the SBP, for the week ended June 26, 2004, both notes in circulation and issued declined. Notes in circulation stood at Rs613,649.697 million against the earlier week's figure of Rs619,916.735 million, a fall of Rs6,267.038 million. As compared to the corresponding week a year ago when it was Rs524,889.747 million, the figure was higher by Rs88,759.95 million.

Total notes issued also recorded a fall in the week over preceding week's level. At Rs613,825.577 million it was smaller by Rs6,299.917 million over the figure of Rs620,125.494 million recorded a week earlier.

In the corresponding week last year it amounted to Rs525,112.852 million, which shows current week's figure to be higher by Rs88,712.725 million over last year's corresponding figure.

Approved foreign exchange increased by rising to Rs441,706.527 million or by Rs3,133.802 million over preceding week's figure of Rs440,572.725 million. Compared to the corresponding week a year ago, when the figure was Rs459,114.586 million, the current figure was lower by Rs17,408.059 million.

Balances held outside Pakistan in approved foreign exchange declined in the week under review. It stood at Rs189,292.704 million over preceding week's figure of Rs190,385.506 million, a fall of Rs1,092.802 million. Compared to last year's corresponding figure of Rs104,044.570 million, the current week's figure is substantially higher by Rs85,248.134 million.

Loans and advances of scheduled banks to the three sectors - agricultural, industrial and export showed a mixed trend. The agricultural sector received Rs56,755.539 million, against preceding week's figure of Rs56,255.539 million, an increase of Rs500 million.

The current week's figure is larger by Rs986.081 million over last year's corresponding figure of Rs55,769.458 million. There was an inflow of Rs2,338.285 million to the industrial sector against preceding week's figure of Rs2,339.037 million, a decline of Rs0.752 million. Compared to last year's corresponding figure of Rs2,815.481 million, the current week's figure is lower by Rs477.196 million.

Export sector received Rs87,715.199 million against the previous week's figure of Rs86,742.189 million, a rise of Rs973.01 million. Current week's figure was larger by Rs30,940.583 million over last year's corresponding figure of Rs56,774.616 million.

According to the weekly statement of position of scheduled banks for the week ended June 26, 2004, the sum of demand and time liabilities increased further in the week under review.

The sum total stood at Rs2,076,716 million against preceding week's Rs2,059,436 million, a rise of Rs17,280 million. As compared to the total deposits of Rs1,753,313 million in the corresponding period last year, current week's deposits were higher by Rs323,403 million.

During the week under review, demand deposits stood at Rs1,041,211 million, a rise of Rs11,459 million over previous week's Rs1,029,752 million. It was higher against last year's corresponding figure of Rs824,056 million by Rs217,155 million.

Time deposits rose in the current week over preceding week's figure. At Rs1,035,505 million it was larger by Rs5,821 million over previous week's Rs1,029,684 million and by Rs106,248 million over last year's corresponding figure of Rs929,257 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities increased in the current week. At Rs160,083 million it was larger by Rs2,292 million over preceding week's Rs157,154 million. Compared to last year's corresponding figure of Rs137,966 million, the current week's figure is higher by Rs22,117 million.

Scheduled banks borrowings from banks abroad stood at Rs7,703 million in the current week, as against Rs5,868 million a week ago, a rise of Rs1,835 million. It was smaller by Rs14,770 million over last year's corresponding figure of Rs22,473 million.

Money at call and short notice in Pakistan increased in the week over previous week's figure. It stood at Rs32,119 million, a rise of Rs1,892 million over preceding week's Rs30,227 million. When compared to last year's corresponding figure of Rs27,211 million, the current week's figure is lower by Rs4,908 million.

Scheduled banks advances including bills purchased and discounted increased in the week under review. At Rs1,324,585 million it was larger by Rs11,536 million over preceding week's Rs1,313,049 million.