The State Bank of Pakistan conducted two-day open market operation (OMO) on December 11, to mop up excess liquidity on account of inflow of Rs24 billion because of maturity of a previous OMO.

The bank raised about Rs27.7 billion from the banking system at 4.10 per cent against the total participation of Rs34.90 billion. There was little activity in the market due to prolonged weekend on account of Eid holidays.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended November 29, 2008, both notes in circulation and those issued decreased in the week. Notes in circulation stood at Rs1,188.079 billion against earlier week’s figure of Rs1,191.601 billion, a fall of Rs3.522 billion. When compared to the corresponding week a year ago when it was Rs991.255 billion, the current week’s figure is higher by Rs196.824 billion.

Total notes issued also decreased in the current week over preceding week’s level. At Rs1,188.217 billion it was smaller by Rs3.506 billion over the figure of Rs1,191.723 billion recorded a week earlier.

In the corresponding week last year it amounted to Rs991.464 billion, which shows current week’s figure to be higher by Rs196.753 billion over last year’s corresponding figure.

Approved foreign exchange increased in the week to Rs200.447 billion or by Rs27.079 billion over preceding week’s figure of Rs173.368 billion. When compared to the corresponding week a year ago, when the figure was Rs716.027 billion, the current week’s figure is lower by Rs515.58 billion.

Balances held outside Pakistan in approved foreign exchange rose substantially in the week under review. It stood at Rs310.480 billion over preceding week’s figure of Rs140.683 billion, a rise of Rs169.797 billion. Compared to last year’s corresponding figure of Rs147.069 billion, the current week’s figure is larger by Rs163.411 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 Rs57.777 billion, similar to preceding week’s figure. The current week’s figure is smaller by Rs0.078 billion over last year’s corresponding figure of Rs57.855 billion.

There was an inflow of Rs36.507 billion to the industrial sector during the week under review, a fall of Rs0.042 billion against preceding week’s figure of Rs36.549 billion. When compared to last year’s corresponding figure of Rs40.296 billion, the current week’s figure is smaller by Rs3.789 billion.

The export sector received Rs134.282 billion against previous week’s figure of Rs117.863 billion, larger by Rs16.419 billion. Current week’s figure was larger by Rs34.539 billion over last year’s corresponding figure of Rs99.743 billion.