Banking system continues to face excess liquidity. The market is stated to be in surplus to the tune of Rs7-8 billion. The State Bank of Pakistan, in a move to absorb part of the excess liquidity , conducted an open market operation on August 10, and sold Treasury bills under one-week and two-week repurchase agreement.

The bank raised Rs3.175 billion at 1.25 per cent through repo sale of the TBs - Rs3 billion for one-week and Rs175 million for two-weeks - against the total demand of Rs6.425 billion by the banks.

According to the weekly statement of position of scheduled banks for the week ended July 31, 2004, the sum of demand and time liabilities rose in the week under review.

The sum total stood at Rs2,144,556 million against preceding week's Rs2,127,596 million, a rise of Rs16,960 million. As compared to the total deposits of Rs1,767,793 million in the corresponding period last year, current week's deposits were higher by Rs376,763 million.

During the week under review, demand deposits stood at Rs1,099, 351 million, a rise of Rs20,014 million over previous week's Rs1,079,337 million. It was higher against last year's corresponding figure of Rs844,591 million by Rs254,760 million.

Time deposits continued to decline in the current week. At Rs1,045,205 million it was smaller by Rs3,054 million over previous week's Rs1,048,259 million but higher by Rs122,003 million over last year's corresponding figure of Rs923,202 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities decreased further in the current week. At Rs159,566 million it was smaller by Rs90 million over preceding week's Rs159,656 million. Compared to last year's corresponding figure of Rs131,584 million, the current week's figure is higher by Rs27,982 million.

Scheduled banks borrowings from banks abroad stood at Rs3,736 million in the current week, as against Rs4,298 million a week ago, a fall of Rs562 million. It was smaller by Rs16,926 million over last year's corresponding figure of Rs20,662 million.

Money at call and short notice in Pakistan decreased in the week over previous week's figure. It stood at Rs33,379 million, a fall of Rs1,363 million over preceding week's Rs34,742 million. When compared to last year's corresponding figure of Rs22,456 million, the current week's figure is higher by Rs10,923 million.

Scheduled banks' advances including bills purchased and discounted rose in the week under review. At Rs1,347,155 million it was larger by Rs1,821 million over preceding week's Rs1,345,334 million. Compared to the corresponding figure a year ago, when advances were to the tune of Rs1,043,114 million, the current week's advances are higher by Rs302,041 million.

Scheduled banks investment in central government securities, Treasury bills and other approved securities decreased in the current week when compared to preceding week's level. Such investments amounted to Rs780,821 million, a fall of Rs25,136 million over previous week's Rs805,959 million.

Compared to last year's corresponding figure of Rs782,769 million, the current week's investment is lower by Rs946 million. Total assets of scheduled banks increased in the week under review.

These stood at Rs3,007,447 million against previous week's Rs3,003,035 million, a rise of Rs5,412 million. Compared to last year's corresponding figure of Rs2,523,740 million it shows a rise of Rs483,707 million.