KARACHI, July 11: The overnight rates eased slightly on Monday despite an outflow of Rs9.2 billion from the money market, and dealers said rates may fall further in coming days. Overnight rates closed at 5.5 per cent, down from Saturday’s level of around 6.0 per cent. “The market is not very liquid but has enough funds for banks to manage their reserve positions,” said a dealer at a major local bank.

“Rates remained high last week as most banks were short on averaging,” he said.

Pakistani banks are required to keep a minimum of five per cent of their cash reserves with the central bank over the weekend.

A dealer at a state-run bank said rates were likely to ease more in coming days provided the central bank does not mop up more funds.

Earlier in the day, the State Bank of Pakistan mopped up Rs9.2 billion from the market in a 10-day repo at a rate of 7.5 per cent.

“The market is seeing some small regular inflows which are sufficient to meet funds demand for the moment,” he said.

However, dealers said the next major cash inflow was scheduled for Aug 4, when Rs86.02 billion would flow into the market from maturing government securities.—Reuters