KARACHI, March 27: Short-term money rates fell sharply on Thursday amid increased liquidity and dealers said they expected rates to remain around current levels for the rest of the week.Overnight call rates ended at 2 per cent, down from
Wednesday’s close of 10.25 per cent.
“Even though the State Bank conducted a repo, rates fell because there was an inflow of Rs49 billion,” said a brokerage dealer.
The central bank sold Rs21.9 billion of Treasury bills on Thursday under four-day repo contracts at 9 per cent to mop up funds from the money market.
Dealers said the affect of the sale was offset by inflows of Rs49 billion from maturing government securities and said they expected another mop-up on Friday.
Dealers said they were also waiting for a Pakistan
Investment Bond auction on March 29. The central bank said it planned to raise Rs20 billion from the auction of long-term government bonds.
In the currency market, the rupee slightly firmer at 62.78/83 to the dollar compared with Wednesday’s close of 62.81/87.Dealers said the rupee was likely to remain stable in the near-term as inflows of foreign investment and higher remittances from Pakistanis abroad were likely to prevent a sharp decline.--Reuters
