ON October 13, the State Bank of Pakistan injected Rs4.6bn into the banking system to ease the liquidity crunch. The Bank conducted an open market operation and bought back Treasury Bills just for two days at the rate of 8.2 per cent.

Earlier in the week the SBP had pumped in Rs19.2bn. The market is still short of liquidity, as it offered to sell papers worth Rs11.6bn.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended July 2October 1, 2005, both notes in circulation and those issued increased in the week.

Total notes issued also rose in the current week over preceding week’s level. At Rs710,167.451m it was higher by Rs1,385.717m over the figure of Rs708,781.734m recorded a week earlier.

Approved foreign exchange rose in the week to Rs453,689.376m or by Rs3,438.689m over preceding week’s figure of Rs450,250.687m.

Balances held outside Pakistan in approved foreign exchange declined in the week under review. It stood at Rs140,338.744m over preceding week’s figure of Rs141,300.286m, showing a fall of Rs961.542m.

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 Rs60,224.062m, similar to preceding week’s figure. The current week’s figure is larger by Rs1,818.781m over last year’s corresponding figure of Rs58,405.281m.

There was an inflow of Rs1,659.606m to the industrial sector during the week under review, a fall of Rs0.016m against preceding week’s figure of Rs1,659.622m.

The export sector received Rs99,744.672m against previous week’s figure of Rs98,992.774m, an increase of Rs751.898m. Current week’s figure was larger by Rs7,152.902m over last year’s corresponding figure of Rs92,591.770m.

According to the weekly statement of position of all scheduled banks for the week ended October 1, 2005, deposits and other accounts of the scheduled banks stood at Rs2,419.142bn, having risen by Rs10.72bn over preceding week’s figure of Rs2,408.42 billon. Commercial banks deposits showed a rise of Rs10.6bn over the week to Rs2,406.040bn against preceding week’s Rs2,395.44bn, while of specialized banks it rose by Rs0.12bn to Rs13.10bn, over previous week’s Rs12.98bn.

Borrowings by all scheduled banks declined during the week. It fell to Rs286.54bn over preceding week’s figure of Rs303.04bn, a fall of Rs16.5bn. This was primarily due to substantial decline in the borrowings by commercial banks, which fell to Rs206.73bn against previous week’s Rs223.30bn, a fall of Rs16.57bn, while borrowings by specialised banks rose by Rs0.06bn to Rs79.81bn against Rs79.75bn a week earlier.

Gross advances stood at Rs1,821.59bn in the week under review, a rise of Rs18.03bn over preceding week’s figure of Rs1,803.29bn. Advances by commercial banks rose to Rs1,711.88bn against earlier week’s figure of Rs1,693.23bn or by Rs18.65bn.

Investments of all scheduled banks declined in the week by Rs42.37bn to Rs724.18bn against preceding week’s figure of Rs766.55bn. Commercial banks investment level fell to Rs712.76bn, from earlier week’s Rs756.18bn or by Rs43.42bn.

Cash and balances with treasury banks of all scheduled banks recorded a rise of Rs12.25bn during the week to stand at Rs230.44bn against earlier week’s Rs218.19bn. The figure for commercial banks rose to Rs228.81bn against preceding week’s figure of Rs216.57bn, a rise of Rs12.24bn. For specialized banks the increase was to the tune of Rs0.01bn to Rs1.63bn, against earlier week’s figure of Rs1.62bn.

Total assets of scheduled banks stood at Rs3,170.01bn, an increase of Rs4.903bn, over preceding week’s figure of Rs3,165.11bn. Meanwhile, commercial banks assets stood at Rs3,060.756bn, higher by Rs4.879bn over previous week’s figure of Rs3,055.877bn. Specialized banks assets rose by Rs0.03bn to Rs109.26bn against previous week’s Rs109.23bn.