On June 18, the State Bank of Pakistan raised the cut off yield on treasury bills of all three maturities. The benchmark six month T-bills rate went up to 11.49 per cent from 11.24 per cent.

The cut off yield on 12 month T-bills rose to 11.73 per cent from 11.48 per cent, while yield on the 3 month paper reached 11.41 per cent up from 11.23 per cent.

The SBP sold six month bills worth Rs312 million, 12 month bills wroth Rs2.82 billion and 3 month paper worth Rs12.06 billion. The central bank had set a pre-auction target of Rs20 billion and received bids worth Rs18.63 billion.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended June 7, 2008, both notes in circulation and those issued increased in the week. Notes in circulation stood at Rs1,068.590 billion against earlier week’s figure of Rs1,051.806 billion, a rise of Rs16.784 billion. When compared to the corresponding week a year ago when it was Rs916.360 billion, the current week’s figure is higher by Rs152.23 billion.

Total notes issued also increased in the current week over preceding week’s level. At Rs1,068.765 billion it was higher by Rs16.793 billion over the figure of Rs1,051.972 billion recorded a week earlier. In the corresponding week last year it amounted to Rs916.585 billion, which shows current week’s figure to be higher by Rs152.18 billion over last year’s corresponding figure.

Approved foreign exchange declined in the week to Rs421.494 billion or by Rs2.851 billion over preceding week’s figure of Rs424.345 billion. When compared to the corresponding week a year ago, when the figure was Rs659.717 billion, the current week’s figure is lower by Rs238.223 billion.

Balances held outside Pakistan in approved foreign exchange decreased in the week under review. It stood at Rs155.082 billion over preceding week’s figure of Rs166.984 billion, a fall of Rs11.902 billion. Compared to last year’s corresponding figure of Rs138.863 billion, the current week’s figure is larger by Rs16.219 billion.

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 Rs49.777 billion, similar to preceding week’s figure. The current week’s figure is smaller by Rs11.376 billion over last year’s corresponding figure of Rs61.153 billion.

There was an inflow of Rs40.019 billion to the industrial sector during the week under review, a rise of Rs0.01 billion against preceding week’s figure of Rs40.009 billion. When compared to last year’s corresponding figure of Rs42.305 billion, the current week’s figure is smaller by Rs2.286 billion.

The export sector received Rs99.854 billion against previous week’s figure of Rs100.215 billion, smaller by Rs0.361 billion. Current week’s figure was smaller by Rs37.126 billion over last year’s corresponding figure of Rs136.980 billion.

According to the weekly statement of position of all scheduled banks for the week ended June 7, 2008, deposits and other accounts of the scheduled banks stood at Rs3,701.257 billion, larger by Rs5.049 billion over preceding week’s figure of Rs3,696.208 billion. Commercial banks deposits showed a rise of Rs5.124 billion over the week to Rs3,688.929 billion, against preceding week’s Rs3,683.805 billion. Specialised banks deposits stood at Rs12.327 billion, against preceding week’s Rs12.404 billion, a fall of Rs0.077 billion.

Borrowings by all scheduled banks decreased during the week over preceding week’s figure. It fell to Rs421.289 billion over preceding week’s figure of Rs433.961 billion, a fall of Rs12.672 billion. This was primarily due to a fall in the borrowings by commercial banks, which fell to Rs339.848 billion against previous week’s Rs352.725 billion, or by Rs12.877 billion. Borrowings by specialized banks stood at Rs81.441 billion, against preceding week’s figure of Rs81.236 billion.