THE State Bank of Pakistan (SBP) on November 21, sold Rs5 billion worth three-year and five-year Pakistan Investment Bonds at par value.

The SBP sold Rs2.2 billion three-year bonds at 10.5 per cent and 2.8 billion five-year bonds at 11 per cent. The auction of the bonds had generated Rs7.6 billion worth of bids but the SBP accepted bids worth Rs5 billion and rejected the same sticking to its pre-auction sale target of Rs5 billion.

The State Bank had slashed the yield on three and five-year PlBs by 1.3 per cent and 1.2 per cent on November 6, in line with a huge 2 per cent cut in its discount rate announced earlier on October 20, 2001. The central bank has also slashed the yield on 10-year bonds from 13 to 12 per cent but the bonds would be offered for sale at the reduced rate for the first time in December 2001.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended November 17, 2001, both notes in circulation and those issued continued to show an increase in the week. Notes in circulation stood at Rs453,208.853 million against the preceding week’s Rs440,321.367 million, showing an increase of Rs12,887.486 million. When compared to the corresponding week a year ago, when it was Rs394,116.630 million, the current week’s figure is higher by Rs59,092.223 million.

Total notes issued also showed a rise in the current week. At Rs453,380.411 million it was higher by Rs12,882.103 million over a week earlier figure of Rs440,498.308 million. In the corresponding week last year it amounted to Rs394,218.628 million, which shows an increase of Rs59,161.783 million over the year.

Approved foreign exchange, continued to show an upward trend rise in the week under review. It stood at Rs134,690.797 million, showing a rise of Rs1,658.865 million over previous week’s Rs133,031.932 million. When compared to last year’s corresponding figure of Rs43,467.558 million, the current week’s figure is substantially higher by Rs91,223.239 million.

Balances held outside Pakistan in approved foreign exchange, declined in the week under review. It stood at Rs16,090.297 million over preceding week’s figure of Rs16,815.193 million, showing decrease of Rs724.896 million. Compared to last year’s corresponding figure of Rs19,644.226 million, the current week’s figure is smaller by Rs3,553.929 million.

Loans and advances of scheduled banks to the three sectors, agricultural, industrial and export showed a mixed picture in the week under review. The agricultural sector received Rs54,291.790 million, similar to preceding week’s figure. The current week’s figure is larger by Rs372.53 million over last year’s corresponding figure of Rs53,919,260 million.

The export sector received Rs52,995.010 million over previous week’s Rs53,975.777 million, showing a fall of Rs980.767 million. Current week’s figure was lower by Rs25,289.146 million over last year’s corresponding figure of Rs78,284.156 million. According to the weekly statement of position of scheduled banks for the week ended November 10, 2001’ the sum of demand and time liabilities continued to rise, due to an increase in both demand and time deposits in the week under review. The sum total stood at Rs1,303,988 million against preceding week’s Rs1,297,208 million, showing an increase of Rs6,780 million. As compared to the total deposits of Rs.1,204.134 million in the corresponding period last year, current week’s deposits were higher by Rs99,854 million.

During the week under review, demand deposits rose further to Rs572,066 million, or by Rs6,594 million over the previous week’s Rs565,472 million, and was also higher against last year’s corresponding figure of Rs507,287 million by Rs64,779 million.

In the current week, time deposits were higher over the preceding week, and against the corresponding week last year. At Rs731,922 million it was higher by Rs186 million over previous week’s Rs731,736 million, and by Rs35,075 million, over last year’s corresponding figure of Rs696,847 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities declined in the current week. At Rs124,772 million it was lower by Rs551 million over preceding week’s Rs125,323 million. Compared to last year’s corresponding figure of Rs153,050 million, the current week’s figure is lower by Rs28,278 million.

Scheduled banks borrowings from banks abroad stood at Rs14,630 million in the current week as against Rs14,999 million a week ago, showing a decline of Rs369 million. It was lower by Rs18,611 million over last year’s corresponding figure of Rs33,241 million.

Money at call and short notice in Pakistan showed a decline in the week under review. It stood at Rs49,169 million, showing a fall of Rs566 million over preceding week’s Rs49,735 million. Current week’s figure was lower by Rs12,213 million against last year’s corresponding figure of Rs36,956 million.

Scheduled banks advances including bills purchased and discounted, showed a rise in the week under review. At Rs943,191 million it was higher by Rs6,330 million over preceding week’s Rs936,861 million.