ON January 13, the State Bank of Pakistan injected Rs20.2 billion in the market through an Open Market Operation at the rate of 8.05 per cent. The market is short of liquidity and the banks need the extra liquidity to meet their cash reserve requirements with the SBP. According to the Statement of Affairs of the State Bank of Pakistan, for the week ended December 31, 2005, both notes in circulation and those issued declined further during the week. Notes in circulation stood at Rs769,617.476 million against earlier week’s figure of Rs784,859.046 million, a fall of Rs15,241.57 million.

Total notes issued also fell in the current week over preceding week’s level. At Rs769,774.119 million it was smaller by Rs15,289.977 million over the figure of Rs785,064.096 million recorded a week earlier.

Approved foreign exchange increased in the week to Rs414,829.250 million or by Rs3,046.139 million over preceding week’s figure of Rs411,783.111 million.

Balances held outside Pakistan in approved foreign exchange increased in the week under review. It stood at Rs167,964.781 million over preceding week’s figure of Rs147,913.978 million, showing a rise of Rs20,050.803 million.

Loans and advances of scheduled banks to the three sectors – agricultural, industrial and export showed a mixed trend in the week under review. The agricultural sector received Rs63,627.640 million, against preceding week’s figure of Rs63,126.897 million, showing an increase of Rs500.743 million.

There was an inflow of Rs3,066.946 million to the industrial sector during the week under review, a rise of Rs242.7 million against preceding week’s figure of Rs2,824.246 million.

The export sector received Rs106,386.319 million against previous week’s figure of Rs106,044.173 million, an increase of Rs342.146 million.