May 1, 2006	Monday	Rabi-us-Sani 2, 1427

ON April 26, against a target of Rs3 billion set by the State Bank for the sale of Treasury bills, banks offered only Rs600 million. The SBP rejected Rs100 million and accepted Rs500 million for one year.

The banks have been facing acute shortage of liquidity for more than a month and it forced them to avoid participating in the auction. The participation could send them to discount window for higher borrowing.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended April 15, 2006, both notes in circulation and those issued increased during the week. Notes in circulation stood at Rs801,026.717 million against earlier week’s figure of Rs799,551.565 million, a rise of Rs1,475.152 million. When compared to the corresponding week a year ago when it was Rs715,082.832 million, the current week’s figure is higher by Rs85,943.885 million.

Total notes issued also increased in the current week over preceding week’s level. At Rs801,178.199 million it was larger by Rs1,494.518 million over the figure of Rs799,683.681 million recorded a week earlier. In the corresponding week last year it amounted to Rs715,266.133 million, which shows current week’s figure to be higher by Rs85,912.066 million over last year’s corresponding figure.

Approved foreign exchange increased in the week to Rs512,859.600 million or by Rs18,024.740 million over preceding week’s figure of Rs494,834.860 million. When compared to the corresponding week a year ago, when the figure was Rs506,693.933 million, the current week’s figure is larger by Rs6,165.667 million.

Balances held outside Pakistan in approved foreign exchange increased in the week under review. It stood at Rs159,342.519 million over preceding week’s figure of Rs140,581.064 million, showing a rise of Rs18,761.455 million. Compared to last year’s corresponding figure of Rs125,642.729 million, the current week’s figure lower is by Rs33,699.790 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 Rs61,650.923 million, similar to preceding week’s figure. The current week’s figure is larger by Rs2,641.486 million over last year’s corresponding figure of Rs59,009.437 million.

There was an inflow of Rs5,706.844 million to the industrial sector during the week under review, a rise of Rs5,166.069 million against preceding week’s figure of Rs5,470.775 million. When compared to last year’s corresponding figure of Rs1,258.034 million, the current week’s figure is higher by Rs4,448.810 million.

The export sector received Rs106,513.032 million against previous week’s figure of Rs108,033.719 million, a fall of Rs1,520.687 million. Current week’s figure was smaller by Rs1,723.878 million over last year’s corresponding figure of Rs108,236.910 million.