On August 5, the State Bank of Pakistan borrowed Rs54.75 billion from the inter bank money market to absorb part of the excess liquidity. The SBP raised Rs32.75 billion under repurchase agreement for two weeks at 1.25 per cent and Rs22 billion for four weeks at 1.65 per cent.

A day earlier the SBP had sold Rs51.15 billion worth of three-month and one year T-bills at a regular auction. In the auction the SBP raised the cut-off yield by 13 basis points each to 2.18 per cent and 2.83 per cent, respectively. This sent a signal to the market that the SBP would continue with a gradual hiking of interest rates.

On August 6, the Central Bank conducted the OMO to sell the Treasury Bills under one-week and two-week repurchase agreements. The OMO however, attracted only Rs1.45 billion bids - Rs250 million one week and Rs1.2 billion in two weeks. The Central Bank scraped the OMO.

According to the weekly statement of position of scheduled banks for the week ended July 24, 2004, the sum of demand and time liabilities rose in the week under review.

The sum total stood at Rs2,127,596 million against preceding week's Rs2,125,302 million, a rise of Rs2,294 million. As compared to the total deposits of Rs1,761,092 million in the corresponding period last year, current week's deposits were higher by Rs366,504 million.

During the week under review, demand deposits stood at Rs1,079,337 million, a rise of Rs6,833 million over previous week's Rs1,072,504 million. It was higher against last year's corresponding figure of Rs840,006 million by Rs239,331 million.

Time deposits continued to decline in the current week. At Rs1,048,259 million it was smaller by Rs4,539 million over previous week's Rs1,052,798 million and by Rs127,173 million over last year's corresponding figure of Rs921,086 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities decreased further in the current week. At Rs159,656 million it was smaller by Rs991 million over preceding week's Rs160,647 million. Compared to last year's corresponding figure of Rs132,653 million, the current week's figure is higher by Rs27,003 million.

Scheduled banks borrowings from banks abroad stood at Rs4,298 million in the current week, as against Rs4,520 million a week ago, a fall of Rs222 million. It was smaller by Rs16,581 million over last year's corresponding figure of Rs20,879 million.

Money at call and short notice in Pakistan decreased in the week over previous week's figure. It stood at Rs34,742 million, a fall of Rs674 million over preceding week's Rs35,416 million.

When compared to last year's corresponding figure of Rs23,193 million, the current week's figure is higher by Rs11,549 million. Scheduled banks' advances including bills purchased and discounted rose in the week under review.

At Rs1,345,334 million it was larger by Rs4,876 million over preceding week's Rs1,340,458 million. Compared to the corresponding figure a year ago, when advances were to the tune of Rs1,042,822 million, the current week's advances are higher by Rs302,512 million.

Scheduled banks investment in central government securities, Treasury bills and other approved securities increased in the current week when compared to preceding week's level.

Such investments amounted to Rs805,959 million, a rise of Rs12,157 million over previous week's Rs793,802 million. Compared to last year's corresponding figure of Rs764,572 million, the current week's investment is higher by Rs41,387 million.

Total assets of scheduled banks increased in the week under review. These stood at Rs3,003,035 million against previous week's Rs2,998,273 million, a rise of Rs4,762 million. Compared to last year's corresponding figure of Rs2,522,573 million it shows a rise of Rs480,462 million.