January 31, 2008	Thursday	Muharram 21, 1429

KARACHI, Jan 30: The State Bank of Pakistan received bids of Rs5 billion only for treasury bills on Wednesday against a target of Rs65 billion.

The SBP received Rs4,938 million for one-year maturity and Rs95.530 million for six-month T-bills. No bid was offered for three-month TBs. However, the central bank rejected all bids.

Market dealers said that the banks had decided not to participate in the auction, mainly because of speculation regarding the discount rate increase.

The SBP will announce its monitory policy on Thursday. Money dealers and banks were expecting a change in the discount rate as well as cash reserve requirement.The dealers said banks took right the decision as a rise in discount rate might bring vital change in the interest rate scenario. They said an inflow of about Rs65 billion was scheduled on Thursday.

Bankers said the surplus liquidity would be flushed out through Open Market Operations and the State Bank would come with frequent operations just after the announcement of monitory policy.