On June 8, the State Bank of Pakistan sold Rs108.6 billion worth of Treasury bills of three-month, six-month and one year, against the target of Rs77 billion. The weighted average yield on six-month bills was raised to 7.90 per cent from 7.82 per cent in late May.

The State Bank has reverted to its earlier stance of gradual increase in the Treasury bill rates to ensure that while containing inflation, the increased rates do not hamper economic growth. By keeping the yields below 8 per cent, the central bank has signalled that the days of aggressively raising rates are over.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended June 4, 2005, both notes in circulation and those issued increased in the week. Notes in circulation stood at Rs724,107.101 million against earlier week’s figure of Rs719,162.613 million, a rise of Rs4,944.488 million. When compared to the corresponding week a year ago when it was Rs620,571.091 million, the current week’s figure is higher by Rs103,536.01 million.

Total notes issued also rose in the current week over preceding week’s level. At Rs724,256.087 million it was higher by Rs4,862.192 million over the figure of Rs719,393.895 million recorded a week earlier. In the corresponding week last year it amounted to Rs620,733.494 million, which shows current week’s figure to be higher by Rs103,522.593 million over last year’s corresponding figure.

Approved foreign exchange fell in the week to Rs473,264.827 million or by Rs2,076.090 million over preceding week’s figure of Rs475,340.917 million. When compared to the corresponding week a year ago, when the figure was Rs435,284.002 million, the current week’s figure was higher by Rs37,980.825 million.

Balances held outside Pakistan in approved foreign exchange decreased in the week under review. It stood at Rs131,238.287 million over preceding week’s figure of Rs139,600.763 million, a fall of Rs8,362.476 million. Compared to last year’s corresponding figure of Rs201,514.492 million, the current week’s figure is smaller by Rs70,276.205 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 Rs59,571.437 million, similar to preceding week’s figure. The current week’s figure is larger by Rs3,515.898 million over last year’s corresponding figure of Rs56,055.539 million.

There was an inflow of Rs1,362.170 million to the industrial sector during the week under review, similar to preceding week’s figure. When compared to last year’s corresponding figure of Rs2,357.110 million, the current week’s figure is lower by Rs994.940 million.

The export sector received Rs109,847.890 million against previous week’s figure of Rs110,487.878 million, a fall of Rs639.988 million. Current week’s figure was larger by Rs22,258.650 million over last year’s corresponding figure of Rs87,589.240 million.

According to the weekly statement of position of scheduled banks for the week ended May 21, 2005, the sum of demand and time liabilities rose in the week under review. The sum total stood at Rs2,407,132 million against preceding week’s Rs2,395,891 million, a rise of Rs11,241 million. As compared to the total deposits of Rs2,021,552 million in the corresponding period last year, current week’s deposits were higher by Rs385,580 million.

During the week under review, demand deposits stood at Rs1,211,470 million, a fall of Rs5,451 million over previous week’s Rs1,216,921 million. It was higher against last year’s corresponding figure of Rs1,014,610 million by Rs196,860 million.

Time deposits also rose in the current week. At Rs1,195,662 million it was higher by Rs16,692 million over previous week’s Rs1,178,970 million and by Rs188,720 million over last year’s corresponding figure of Rs1,006,942 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities fell in the current week. At Rs188,825 million it was lower by Rs83 million over preceding week’s Rs188,908 million. Compared to last year’s corresponding figure of Rs157,455 million, the current week’s figure is higher by Rs31,370 million.