June 12, 2006	Monday	Jumadi-ul-Awwal 15, 1427

ON June 7, the State Bank of Pakistan increased the cut-off yield on six- month Treasury bills, which was about five-year highs.

After nine months, the SBP changed the T-bills rates and increased the six-month rate by 15 basis points to 8.4433 per cent. It increased the three-month T-bills rate by 22 basis points to 8.3256 per cent. The central bank received total bids of Rs31.735 billion against the pre-auction target of Rs21 billion.

The SBP sold Rs575 million of six-month bills, Rs1.506 billion of three-month and Rs23.629 billion of 12-month bills. Analyst said the rates were increased because investors had lost interest in the papers.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended May 27, 2006, both notes in circulation and those issued decreased during the week. Notes in circulation stood at Rs794,210.379 million against earlier week’s figure of Rs806,603.447 million, a fall of Rs12,393.068 million. When compared to the corresponding week a year ago when it was Rs719,162.613 million, the current week’s figure is higher by Rs75,047.766 million.

Total notes issued also decreased in the current week over preceding week’s level. At Rs794,341.043 million it was lower by Rs12,407.107 million over the figure of Rs806,748.150 million recorded a week earlier. In the corresponding week last year it amounted to Rs719,393.895 million, which shows current week’s figure to be higher by Rs74,947.148 million over last year’s corresponding figure.

Approved foreign exchange increased in the week to Rs547,106.800 million or by Rs3,295.344 million over preceding week’s figure of Rs550,402.144 million. When compared to the corresponding week a year ago, when the figure was Rs475,340.917 million, the current week’s figure is larger by Rs71,765.883 million.

Balances held outside Pakistan in approved foreign exchange increased in the week under review. It stood at Rs120,549.907 million over preceding week’s figure of Rs117,677.193 million, showing a rise of Rs2,872.714 million. Compared to last year’s corresponding figure of Rs139,600.763 million, the current week’s figure is lower by Rs19,050.856 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 Rs61,643.982 million, similar to preceding week’s figure. The current week’s figure is larger by Rs2,072.545 million over last year’s corresponding figure of Rs59,571.437 million.

There was an inflow of Rs6,337.311 million to the industrial sector during the week under review, a rise of Rs57.796 million against preceding week’s figure of Rs6,279.515 million. When compared to last year’s corresponding figure of Rs1,362.170 million, the current week’s figure is higher by Rs4,975.141 million.

The export sector received Rs108,989.968 million against previous week’s figure of Rs109,704.885 million, a fall of Rs714.917 million. Current week’s figure was smaller by Rs1,497.91 million over last year’s corresponding figure of Rs110,487.878 million.

According to the weekly statement of position of all scheduled banks for the week ended May 27, 2006, deposits and other accounts of the scheduled banks stood at Rs2,733.969 billion, rising by Rs21.357 billion over preceding week’s figure of Rs2,712.612 billon. Commercial banks deposits showed a rise of Rs21.192 billion over the week to Rs2,722.164 billion against preceding week’s Rs2,700.972 billion, and of specialized banks it fell by Rs0.165 billion to Rs11.805 billion, over previous week’s Rs11.640 billion.

Borrowings by all scheduled banks declined during the week over preceding week’s figure. It fell to Rs346.751 billion over preceding week’s figure of Rs356.922 billion, a fall of Rs10.171 billion. This was primarily due to a fall in the borrowings by commercial banks, which fell to Rs260.148 billion against previous week’s Rs270.353 billion, or by Rs10.205 billion, while borrowings by specialised banks stood at Rs86.604 billion.

Gross advances stood at Rs2,115.049 billion in the week under review, a rise of Rs9.826 million over preceding week’s figure of Rs2,105.223 billion. Advances by commercial banks rose to Rs2,024.821 billion against earlier week’s figure of Rs2,015.112 billion, larger by Rs9.709 billion, and of specialized banks it stood at Rs90.229 billion.