18 October 2004	Monday	03 Ramazan 1425

On October 13, the State Bank of Pakistan sold Rs1.25 billion of six-month Treasury bills and kept the average yield at 3.19 per cent. The State Bank made a conscious effort to keep the rates from rising , for had it sold Rs5 billion as targeted it would have had to raise the average yield to 3.4 per cent.

On October 14, banks that had run short of cash borrowed Rs25.6 billion overnight funds from the State Bank discount window. A day earlier also they had borrowed Rs12.6 billion from the central bank. The temporary liquidity shortage was partly because of reserve averaging for the week drawdown of reserves ahead of Ramazan.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended September 18, 2004, both notes in circulation and those issued declined in the week. Notes in circulation stood at Rs620,227.970 million against earlier week's figure of Rs621,633.140 million, a fall of Rs1,405.17 million. When compared to the corresponding week a year ago when it was Rs526,817.540 million, the current week's figure is higher by Rs93,410.43 million.

Total notes issued also recorded a fall in the current week over preceding week's level. At Rs620,379.530 million it was smaller by Rs1,253.61 million over the figure of Rs621,633.140 million recorded a week earlier. In the corresponding week last year it amounted to Rs526,986.763 million, which shows current week's figure to be higher by Rs93,392.767 million over last year's corresponding figure.

Approved foreign exchange increased in the week, rising to Rs421,479.173 million or by Rs28,583.475 million over preceding week's figure of Rs392,895.698 million. When compared to the corresponding week a year ago, when the figure was Rs446,474.505 million, the current week's figure was lower by Rs24,995.332 million.

Balances held outside Pakistan in approved foreign exchange declined in the week under review. It stood at Rs188,717.833 million over preceding week's figure of Rs216,648.400 million, a fall of Rs27,930.567 million. Compared to last year's corresponding figure of Rs132,650.373 million, the current week's figure is substantially higher by Rs56,067.746 million.

Loans and advances of scheduled banks to the three sectors - agricultural, industrial and export showed a mixed trend in the week under review. The agricultural sector received Rs58,405.281 million, similar to preceding week's figure. The current week's figure is larger by Rs3,625.741 million over last year's corresponding figure of Rs54,779.540 million.

There was an inflow of Rs2,191.187 million to the industrial sector during the week under review, against preceding week's figure of Rs2,193.237 million, a decline of Rs2.05 million. When compared to last year's corresponding figure of Rs2,727.931 million, the current week's figure is lower by Rs536.744 million.

The export sector received Rs85,964.757 million against previous week's figure of Rs79,508.480 million, a rise of Rs6,456.277 million. Current week's figure was larger by Rs27,852.592 million over last year's corresponding figure of Rs58,112.165 million.

According to the weekly statement of position of scheduled banks for the week ended October 2, 2004, the sum of demand and time liabilities declined in the week under review. The sum total stood at Rs2,158,164 million against preceding week's Rs2,160,284 million, a fall of Rs2,120 million. As compared to the total deposits of Rs1,799,623 million in the corresponding period last year, current week's deposits were higher by Rs358,541 million.

During the week under review, demand deposits stood at Rs1,097,894 million, a rise of Rs9,539 million over previous week's Rs1,088,355 million. It was also higher against last year's corresponding figure of Rs871,445 million by Rs226,449 million.

Time deposits however, fell in the current week. At Rs1,060,270 million it was smaller by Rs11,659 million over previous week's Rs1,071,929 million but higher by Rs132,092 million over last year's corresponding figure of Rs928,178 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities increased in the current week. At Rs164,936 million it was larger by Rs2,106 million over preceding week's Rs162,830 million. Compared to last year's corresponding figure of Rs139,774 million, the current week's figure is higher by Rs25,162 million.

Scheduled banks borrowings from banks abroad stood at Rs5,084 million in the current week, as against Rs6,266 million a week ago, a fall of Rs1,182 million. It was smaller by Rs13,783 million over last year's corresponding figure of Rs18,867 million.

Money at call and short notice in Pakistan declined in the week over previous week's figure. It stood at Rs33,271 million, a fall of Rs3,870 million over preceding week's Rs37,141 million. When compared to last year's corresponding figure of Rs21,332 million, the current week's figure is higher by Rs11,939 million.