KARACHI, April 7: The money market remained tight on Friday and the banks had to borrow cash from the discount window to meet the shortage. Friday being settlement day requires all banks to maintain 5 per cent cash reserves with the SBP, proved another hot day for those looking for liquidity.

Money market dealers said the overnight rate remained at 8.9 per cent while the banks borrowed Rs700 million from the discount window at 9 per cent.

The shortage of liquidity had emerged as permanent phenomenon in the banking sector as most of the inflows were sucked up by the SBP to keep a tight control over the money flows.

The market remained tight throughout the week and overnight rates never slipped from the highest level despite massive liquidity injections. The SBP pumped in Rs16.5 billion on Wednesday last but failed to ease up the market.

Analysts said the tight situation would prevail next week.