THE cut-off yields on Treasury bills dropped in the first auction to take place after the lowering of the deposit rate and the introduction of the central bank’s ‘target rate’ earlier on.

The government raised Rs90.729bn from the auction held on May 27. Of the total 12-month T-bills fetched Rs43.98bn at a cut-off yield of 6.7535pc, followed by three-month T-bills with Rs24.97bn at 6.6171pc and six-month T-bills with Rs21.78bn at 6.6511pc.

Banks and other investors had showed acute interest in the auction, posting cumulative bids worth Rs320.899bn. Of this, three-month T-bills had attracted bids worth Rs156.104bn, followed by six-month T-bills with Rs87.208bn and three-month T-bills with Rs77.585bn.

Meanwhile, the State Bank injected Rs50.6bn into the banking system through an open market operation on May 25 in a four-day contract, at a rate of return of 6.5pc.

According to the weekly statement of position of all scheduled banks for the week ending May 15, cash and balances with treasury banks of all scheduled banks decreased by 1.59pc to Rs698.602bn, against the earlier week’s level of Rs709.887bn.

Twelve-month Treasury bills fetched the highest amount of Rs43.98bn during the latest T-bill auction

Cash and balances with treasury banks of all commercial banks stood at Rs696.482bn in the week, against the preceding week’s figure of Rs708.056bn, depicting a fall of 1.63pc. Cash and balances with treasury banks of all specialised banks stood at Rs2.121bn in the week, against the preceding week’s figure of Rs1.831bn.

Investments of all scheduled banks stood at Rs5,537.653bn in the week under review, against the preceding week’s figure of Rs5,751.781bn, down 3.72pc.

Investments of all commercial banks stood at Rs5,513.346bn in the week, against the earlier week’s figure of Rs5,728.24bn, showing a fall of 3.75pc. Investments of all specialised banks stood at Rs24.3bn in the week, against the preceding week’s figure of Rs23.5bn.

Gross advances by scheduled banks stood at Rs4,528.321bn in the week ending May 15, up 0.92pc over the previous week’s figure of Rs4,486.877bn.

Advances by commercial banks increased 0.94pc to Rs4,379.159bn in the week, against the previous week’s level of Rs4,338.209bn. Advances by specialised banks stood at Rs149.162bn in the week, against the previous week’s figure of Rs148.667bn.

Total assets of all scheduled banks stood at Rs11,899.844bn in the week under review, down 1.28pc over the preceding week’s figure of Rs12,054bn. Total assets of all commercial banks stood at Rs11,713.964bn in the week.

Published in Dawn, Economic & Business, June 1st, 2015

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