ON December 13 the State Bank of Pakistan carried out an open market operation and mopped up Rs4.2 billion at 7.65 per cent. The overnight rate fell to four per cent on the day from six per cent a day earlier. Banks are holding substantial liquidity to meet requirements before closing the year on December 31. Inflation has fallen below eight per cent and the Treasury bill yields are unlikely to rise.
The banks have shown their reluctance to rent their money at the prevailing T-bills rates demanding returns ranging from 8.1 to 8.29 per cent for three-month and 8.29 to 8.55 per cent on six-month T-bill in the previous auction. The SBP refused to accept their demand and rejected all bids for three and six months.
According to the Statement of Affairs of the State Bank of Pakistan, for the week ended July 2December 03, 2005, both notes in circulation and those issued increased during the week. Notes in circulation stood at Rs780,382.457 million against earlier week’s figure of Rs779,173.330 million, a rise of Rs1,209.127 million. When compared to the corresponding week a year ago when it was Rs705,815.814 million, the current week’s figure is higher by Rs74,566.643 million.
Total notes issued also rose in the current week over preceding week’s level. At Rs780,528.629 million it was larger by Rs1,211.784 million over the figure of Rs779,316.845 million recorded a week earlier. In the corresponding week last year it amounted to Rs705,980.878 million, which shows current week’s figure to be higher by Rs74,547.751 million over last year’s corresponding figure.
Approved foreign exchange increased in the week to Rs416,574.132 million or by Rs3,716.106 million over preceding week’s figure of Rs412,858.026 million. When compared to the corresponding week a year ago, when the figure was Rs435,449.273 million, the current week’s figure is smaller by Rs18,875.141 million.
Balances held outside Pakistan in approved foreign exchange decreased in the week under review. It stood at Rs143,956.683 million over preceding week’s figure of Rs144,768.246 million, showing a fall of Rs811.563 million. Compared to last year’s corresponding figure of Rs126,160.340 million, the current week’s figure is larger by Rs17,796.343 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 Rs61,126.896 against the preceding week’s figure of Rs60,714.062 showing a rise of Rs412.834 The current week’s figure is larger by Rs2,740.202 million over last year’s corresponding figure of Rs58,386.694 million.
There was an inflow of Rs2,360.611 million to the industrial sector during the week under review, a rise of Rs260.117 million against preceding week’s figure of Rs2,100.494 million. When compared to last year’s corresponding figure of Rs1,184.505 million, the current week’s figure is higher by Rs1,176.106 million.
The export sector received Rs104,937.856 million against previous week’s figure of Rs103,543.855 million, a rise of Rs1,394.001 million. Current week’s figure was larger by Rs6,568.955 million over last year’s corresponding figure of Rs98,368.901 million.
According to the weekly statement of position of all scheduled banks for the week ended December 03, 2005, deposits and other accounts of the scheduled banks stood at Rs2,496.089 billion, having risen by Rs12.694 billion over preceding week’s figure of Rs2,483.395 billon. Commercial banks deposits showed a rise of Rs12.825 billion over the week to Rs2,483.731 billion against preceding week’s Rs2,470.906 billion, while of specialized banks it fell by Rs0.131 billion to Rs12.358 billion, over previous week’s Rs12.489 billion.
Borrowings by all scheduled banks during the week increased over preceding week’s figure. It rose to Rs312.618 billion over preceding week’s figure of Rs293.708 billion, a rise of Rs18.91 billion. This was primarily due to rise in the borrowings by commercial banks, which rose to Rs230.051 billion against previous week’s Rs211.562 billion, a rise of Rs18.489 billion, while borrowings by specialised banks rose to Rs82.566 billion over preceding week’s figure of Rs82.147 billion, a rise of Rs0.419 billion.
Gross advances stood at Rs1,960.115 billion in the week under review, a rise of Rs18.296 billion over preceding week’s figure of Rs1,941.819 billion. Advances by commercial banks rose to Rs1,850.084 billion against earlier week’s figure of Rs1,831.477 billion or by Rs18.607 billion.
Investments of all scheduled banks rose in the week by Rs2.259 billion to Rs699.928 billion against preceding week’s figure of Rs697.669 billion. Commercial banks investment level rose to Rs689.126 billion, from earlier week’s Rs687.101 billion or by Rs2.025 billion, while of specialized banks it stood at Rs10.802 billion against previous week’s Rs10.568 billion, a rise of Rs0.234 billion.
Cash and balances with treasury banks of all scheduled banks decreased by Rs4.416 billion during the week to stand at Rs229.262 billion against earlier week’s Rs233.678 billion. The figure for commercial banks fell to Rs227.626 billion against preceding week’s figure of Rs231.962 billion, a fall of Rs4.336 billion. For specialized banks the decline was to the tune of Rs0.081 billion to Rs1.636 billion, against earlier week’s figure of Rs1.717 billion.
Total assets of scheduled banks stood at Rs3,269.617 billion, an increase of Rs34.576 billion, over preceding week’s figure of Rs3,235.041 billion. Meanwhile, commercial banks assets stood at Rs3,159.869 billion, higher by Rs33.972 billion over previous week’s figure of Rs3,125.897 billion. Specialized banks assets fell by Rs0.604 billion to Rs109.748 billion against previous week’s Rs109.144 billion.
ON December 13 the State Bank of Pakistan carried out an open market operation and mopped up Rs4.2 billion at 7.65 per cent. The overnight rate fell to four per cent on the day from six per cent a day earlier. Banks are holding substantial liquidity to meet requirements before closing the year on December 31. Inflation has fallen below eight per cent and the Treasury bill yields are unlikely to rise.
