January 23, 2006	Monday	Zilhaj 22, 1426

ON January 18, the State Bank of Pakistan sold the Treasury Bills worth Rs8.447 billion without any changes in the cut-off yield. The SBP picked up Rs196 million for three-month; Rs576 million for six-month; and Rs7.675 billion for 12-month, respectively.

Once a year investment provides banks an opportunity to use the paper to invest for short-term period and get more profits.

Analysts said that the market was short of liquidity despite an inflow of Rs8 billion on January 12, the settlement day of the T-bills.

Though, the SBP injected Rs30.7 billion and Rs9.3 billion on January 16 and 17, respectively but the move was not enough to bring the market at ease. Analysts said that the short-term injection of liquidity was not the solution. They were of the view that injection should be for longer period like 15 to 30 days.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended January 14, 2006, both notes in circulation and those issued increased substantially during the week. Notes in circulation stood at Rs821,530.738 million against the earlier week’s figure of Rs799,575.493 million, a rise of Rs21,955.245 million. When compared to the corresponding week a year ago when it was Rs716,502.677 million, the current week’s figure is higher by Rs105,028.061 million.

Total notes issued also rose in the current week over preceding week’s level. At Rs821,647.391 million it was larger by Rs21,887.784 million over the figure of Rs799,759.607 million recorded a week earlier. In the corresponding week last year it amounted to Rs716,624.041 million, which shows current week’s figure to be higher by Rs105,023.350 million over last year’s corresponding figure.

The approved foreign exchange declined in the week to Rs431,953.849 million or by Rs9,747.441 million over preceding week’s figure of Rs441,701.290 million. When compared to the corresponding week a year ago, when the figure was Rs422,827.258 million, the current week’s figure is larger by Rs9,126.591 million.

Balances held outside Pakistan in approved foreign exchange increased in the week under review. It stood at Rs141,267.528 million over preceding week’s figure of Rs131,678.844 million, showing a rise of Rs9,588.648 million. Compared to last year’s corresponding figure of Rs139,089.932 million, the current week’s figure higher is by Rs2,177.596 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 Rs60,707.864 million, similar to the preceding week’s figure. The current week’s figure is larger by Rs3,116.420 million over last year’s corresponding figure of Rs57,591.444 million.

There was an inflow of Rs3,203.699 million to the industrial sector during the week under review, a rise of Rs25.059 million against preceding week’s figure of Rs3,178.640 million. When compared to last year’s corresponding figure of Rs1,169.387 million, the current week’s figure is higher by Rs2,034.312 million.

The export sector received Rs105,911.299 million against previous week’s figure of Rs106,206.751 million, a decline of Rs295.452 million. Current week’s figure was larger by Rs1,014.040 million over last year’s corresponding figure of Rs104,897.259 million.

According to the weekly statement of position of all scheduled banks for the week ended December 31, 2005, deposits and other accounts of the scheduled banks stood at Rs2,661.697 billion, having risen by Rs98.288 billion over preceding week’s figure of Rs2,563.409 billon. Commercial banks deposits showed a rise of Rs97.925 billion over the week to Rs2,648.514 billion against preceding week’s Rs2,550.589 billion, while of specialized banks it rose by Rs0.364 billion to Rs13.183 billion, over previous week’s Rs12.819 billion.

The borrowings by all scheduled banks increased during the week over preceding week’s figure. It rose to Rs336.301 billion over preceding week’s figure of Rs311.798 billion, a rise of Rs24.503 billion. This was primarily due to an increase in the borrowings by commercial banks, which rose to Rs251.154 billion against previous week’s Rs227.131 billion, or by Rs24.023 billion, while borrowings by specialised banks also increased to Rs85.146 billion over preceding week’s figure of Rs84.666 billion, a rise of Rs0.480 billion.

The gross advances stood at Rs2,043.982 billion in the week under review, a rise of Rs47.225 billion over preceding week’s figure of Rs1,996.757 billion. Advances by commercial banks rose to Rs1,935.577 billion against earlier week’s figure of Rs1,888.079 billion or by Rs47.498 billion.