KARACHI, June 24: Banks were forced to go for discounting for the second day in a row on Friday to meet cash reserve requirements in a tight money market, dealers said. Banks borrowed Rs12.060 billion from the State Bank’s discount window at 9 per cent under its three-day repo facility.

On Thursday, banks borrowed Rs11.875 billion from the same facility.

Pakistani banks are required to keep a minimum of five per cent of their cash reserves with the central bank over the weekend.

“The shortage of funds will continue near-term as no major inflow is due next week,” said a local bank dealer.

Dealers said the next major cash inflow would be on July 7, when nearly Rs126 billion would flow in from maturing government securities.

The market turned tight on Thursday after an outflow of Rs76.415 billion for the settlement of a Treasury bill auction a day earlier, dealers said.

On Friday, overnight rates remained glued to the top level of 8.9 per cent.—Reuters