ON November 16, the State Bank of Pakistan picked up Rs4.5 billion from the banking system through the Open Market Operation. The overnight rates dropped from 8.9 per cent to 7.5 per cent.

The money market is showing the presence of some liquidity in the market.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended July 2 November 5, 2005, both notes in circulation and those issued showed an increase in the week. Notes in circulation stood at Rs787,143.141m against earlier week’s figure of Rs766,179.646m, a rise of Rs20,963.495m. When compared to the corresponding week a year ago when it was Rs705,815.814m, the current week’s figure is higher by Rs81,327.327m.

Total notes issued also rose in the current week over preceding week’s level. At Rs787,300.401m it was larger by Rs20,880.393m over the figure of Rs766,420.008m recorded a week earlier. In the corresponding week last year it amounted to Rs705,980.878m, which shows current week’s figure to be higher by Rs81,319.523m over last year’s corresponding figure.

Approved foreign exchange also increased in the week to Rs433,930.451m or by Rs3,228.798m over preceding week’s figure of Rs430,701.653m. When compared to the corresponding week a year ago, when the figure was Rs435,449.273m, the current week’s figure is smaller by Rs1,518.822m.

Balances held outside Pakistan in approved foreign exchange declined in the week under review. It stood at Rs142,457.577m over preceding week’s figure of Rs149,839.057m, showing a fall of Rs7,381.48m. Compared to last year’s corresponding figure of Rs126,160.340m, the current week’s figure is larger by Rs16,297.237m.

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 Rs60,714.062m similar to preceding week’s figure. The current week’s figure is larger by Rs2,327.368m over last year’s corresponding figure of Rs58,386.694m.

There was an inflow of Rs1,856.986m to the industrial sector during the week under review, a rise of Rs9.939m against preceding week’s figure of Rs1,847.047m. When compared to last year’s corresponding figure of Rs1,184.505m, the current week’s figure is higher by Rs672.481m.

The export sector received Rs103,233.377m against previous week’s figure of Rs102,426.369m, a rise of Rs807.008m. Current week’s figure was larger by Rs4,864.476 m over last year’s corresponding figure of Rs98,368.901m.

According to the weekly statement of position of all scheduled banks for the week ended October 29, 2005, deposits and other accounts of the scheduled banks stood at Rs2,418.434bn, having risen by Rs11.894bn over preceding week’s figure of Rs2,406.540 billon. Commercial banks deposits showed a rise of Rs11.811bn over the week to Rs2,405.489bn against preceding week’s Rs2,393.678bn, while of specialized banks it rose by Rs0.083bn to Rs12.946bn, over previous week’s Rs12.863bn.

Borrowings by all scheduled banks during the week increased over preceding week’s figure. It rose to Rs289.048bn over preceding week’s figure of Rs276.902bn, a rise of Rs12.146bn. This was primarily due to substantial increase in the borrowings by commercial banks, which rose to Rs206.902bn against previous week’s Rs195.146bn, a rise of Rs11.756bn, while borrowings by specialised banks also rose by Rs0.39bn to Rs82.147bn against Rs81.757bn a week earlier.

Gross advances stood at Rs1,879.695bn in the week under review, a rise of Rs25.112bn over preceding week’s figure of Rs1,854.583bn. Advances by commercial banks rose to Rs1,769.124bn against earlier week’s figure of Rs1,744.100bn or by Rs25.024bn.

Investments of all scheduled banks increased in the week by Rs5.71bn to Rs730.330bn against preceding week’s figure of Rs724.620bn. Commercial banks investment level rose to Rs716.360bn, from earlier week’s Rs710.784bn, while of specialized banks it stood at Rs13.970bn against previous week’s Rs13.836bn.

Cash and balances with treasury banks of all scheduled banks recorded a rise of Rs12.651bn during the week to stand at Rs236.221bn against earlier week’s Rs223.570bn. The figure for commercial banks increased to Rs234.489bn against preceding week’s figure of Rs221.965bn, a rise of Rs12.524bn. For specialized banks the rise was to the tune of Rs0.126bn to Rs1.731bn, against earlier week’s figure of Rs1.605bn.