ON February 7, the State Bank of Pakistan injected Rs13.650 billion into the inter-bank market through the open market operation. The SBP has been conducting OMOs frequently over the past six months and managing the liquidity position through this tool.

Dealers said that the market was trading at an overnight rate of 8.9 per cent before the OMO, but later slipped to 8-8.2 per cent.

On February 10, the SBP for the second time in one week injected another huge amount of liquidity. It injected another Rs21.2 billion into the market, but because the liquidity position was tight it kept the rates high.

Banks approached the SBP discount window to borrow Rs5.227 billion.

According to the weekly statement of position of all scheduled banks for the week ended January 28, 2006, deposits and other accounts of the scheduled banks stood at Rs2,588.582 billion, having risen by Rs10.88 billion over preceding week’s figure of Rs2,577.702 billon. Commercial banks deposits showed a rise of Rs11.192 billion over the week to Rs2,576.096 billion against preceding week’s Rs2,564.904 billion, while of specialized banks it declined by Rs0.411 million to Rs12.486 billion, over previous week’s Rs12.897 billion.

Borrowings by all scheduled banks declined during the week over preceding week’s figure. It fell to Rs307.044 billion over preceding week’s figure of Rs326.743 billion, a fall of Rs19.699 billion. This was primarily due to a decline in the borrowings by commercial banks, which fell to Rs244.341 billion against previous week’s Rs244.630 billion, or by Rs20.289 billion, while borrowings by specialised banks increased to Rs82.704 billion over preceding week’s figure of Rs82.114 billion, a rise of Rs0.59 billion.

Gross advances stood at Rs2,009.207 billion in the week under review, a rise of Rs2.149 billion over preceding week’s figure of Rs2,007.058 billion. Advances by commercial banks rose to Rs1,904.860 billion against earlier week’s figure of Rs1,902.855 billion, higher by Rs2.005 billion.

Investments of all scheduled banks increased in the week by Rs2.614 billion to Rs755.725 billion against preceding week’s figure of Rs753.111 billion. Commercial banks investment level rose to Rs734.468 billion, from earlier week’s Rs733.231 billion, higher by Rs1.237 billion, while of specialized banks it stood at Rs21.257 billion against previous week’s Rs19.880 billion, a rise of Rs1.377 billion.

Cash and balances with treasury banks of all scheduled banks increased by Rs9.691 billion during the week to stand at Rs252.421 billion against earlier week’s Rs242.730 billion. The figure for commercial banks rose to Rs250.520 billion against preceding week’s figure of Rs240.698 billion, a rise of Rs9.822 billion. For specialized banks the fall was to the tune of Rs0.131 million to Rs1.901 billion, against earlier week’s figure of Rs2.032 billion.

Total assets of scheduled banks stood at Rs3,383.329 billion, an increase of Rs9.674 billion, over preceding week’s figure of Rs3,373.655 billion. Meanwhile, commercial banks assets stood at Rs3,263.151 billion, higher by Rs1.945 billion over previous week’s figure of Rs3,261.206 billion. Specialized banks assets rose by Rs7.729 billion to Rs120.179 billion against previous week’s Rs112.450 billion.