KARACHI, Aug 11: the short-term money rates remained firm on Friday, and banks borrowed heavily from the central bank's discount window to meet their weekly cash reserve requirements.

Overnight call rates closed at around 9.4 per cent, unchanged from Wednesday's close, and just below the discount rate of 9.5 per cent at which banks borrowed Rs15.15 billion from the State Bank's three-day repo facility.

“The market was tight as there have been no major cash inflows this week,” said a dealer at a local bank. “So, banks had no choice but to go for discounting,” he said.

Banks are required to keep a minimum of 7.0 per cent of their cash reserves with the central bank over the weekend.

In case of cash shortages, banks can borrow from the central bank’s three-day repo facility.

Dealers said there were inflows of around Rs28 billion expected next week, but added that the impact was likely to be offset by a regular Treasury bill auction to be held on Wednesday.—Reuters