On May 28, the State Bank of Pakistan raised the cut off yield on six month treasury bills by 16 basis points. The bank sold Rs23.7 billion worth of bills, slightly higher than the targeted amount of Rs22 billion at a cut off yield of 1.84 per cent, up from the previous level of 1.68 per cent.

The yield on treasury bills has risen after many months. Since the start of this fiscal year, the yield has followed a falling trend from more than 6 per cent to below 2 per cent, as banks have huge surplus liquidity.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended May 17, 2003, both notes in circulation and those issued maintained the upward trend in the week under review. Notes in circulation stood at Rs540,988.471 million against earlier week’s figure of Rs538,854.781 million, showing a rise of Rs2,133.69 million. When compared to the corresponding week a year ago when it was Rs464,648.690 million, the current week’s figure is higher by Rs76,339.781 million. Total notes issued also recorded a rise in the current week. At Rs541,230.017 million it was larger by Rs2,202.569 million over the figure of Rs539,027.448 million recorded a week earlier. In the corresponding week last year it stood at Rs464,834.223 million, which shows current week’s figure to be higher by Rs76,395.794 million over last year’s figure.

Approved foreign exchange showed a further increase in the week rising to Rs474,683.787 million, larger by Rs8,975.244 million over preceding week’s figure of Rs465,708.543 million. When compared to the corresponding week a year ago, when the figure was Rs215,139.972 million, the current week’s figure was higher by Rs259,543.815 million.

Balances held outside Pakistan in approved foreign exchange showed a further decline in the week under review. It stood at Rs80,573.405 million over preceding week’s figure of Rs88,358.047 million, showing a fall of Rs7,784.642 million. Compared to last year’s corresponding figure of Rs26,780.527 million, the current week’s figure is higher by Rs53,792.878 million.

Loans and advances of scheduled banks to the three sectors — agricultural, industrial and export showed a mixed picture in the week under review. The agricultural sector received Rs54,264.073 million similar to preceding week’s figure. The current week’s figure is higher by Rs426.378 million over last year’s corresponding figure of Rs53,837.695 million.

There was an inflow of Rs2,904.771 million to the industrial sector during the week under review, depicting a decline of Rs14.185 million over previous week’s Rs2,918.956 million. When compared to last year’s corresponding figure of Rs3,587.848 million, the current week’s figure is lower by Rs683.077 million.

The export sector received Rs50,727.080 million against previous week’s figure of Rs50,126.563 million, showing a rise of Rs600.517 million. Current week’s figure was smaller by Rs7,087.364 million over last year’s corresponding figure of Rs57,814.444 million.

According to the weekly statement of position of scheduled banks for the week ended May 17, 2003, the sum of demand and time liabilities continued to rise in the week under review. The sum total stood at Rs1,673,178 million against preceding week’s Rs1,663,471 million, showing a rise of Rs9,707 million. As compared to the total deposits of Rs1,420,750 million in the corresponding period last year, current week’s deposits were higher by Rs252,428 million.

During the week under review, both demand and time deposits rose. Demand deposits rose to Rs771,435 million, showing a rise of Rs8,422 million over previous week’s Rs763,013 million. It was also higher against last year’s corresponding figure of Rs632,692 million by Rs138,743 million.

In the current week, time deposits were higher both over preceding week and against the corresponding week last year. At Rs901,743 million, it was larger by Rs1,286 million over previous week’s Rs900,457 million and by Rs113,685 million, over last year’s corresponding figure of Rs788,058 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities continued to increase in the current week. At Rs131,056 million it was larger by Rs687 million over preceding week’s Rs130,369 million. Compared to last year’s corresponding figure of Rs133,833 million, the current week’s figure is lower by Rs2,777 million. Scheduled banks borrowings from banks abroad stood at Rs15,520 million in the current week, as against Rs15,911 million a week ago, showing a drop of Rs391 million. It was also larger by Rs2,087 million over last year’s corresponding figure of Rs13,433 million.

Money at call and short notice in Pakistan declined in the week under review. It stood at Rs25,066 million, a fall of Rs170 million over preceding week’s Rs25,236 million.