01 October 2004	Friday	15 Shaban 1425

KARACHI, Sept 30: The State Bank on Thursday drained out Rs3.95 billion from an excessively liquid inter-bank market for two weeks through repo sale of treasury bills at an open market operation called for this purpose.

Bankers said the OMO had generated Rs13.2 billion demand for the repo of T-bills but the central bank sold only Rs3.95 billion bills for two weeks at 2 per cent. They said the SBP refrained from selling more bills to keep the rate of return from rising past 2 per cent.

The market on Thursday received an inflow of Rs86 billion but the bulk of it flew out of the system due to settlement of the T-bills auction conducted on Wednesday and for a variety of reasons including transfer of the taxes collected by banks to SBP account.