IN open market operations (OMO) held on March 17, the State Bank of Pakistan mopped up Rs9.5 billion through one-week treasury bills. Earlier on March 16, the central bank sold T-bills worth Rs79.8 billion against the target of Rs50 billion. At the auction, the SBP sold Rs77.2 billion worth of 3-month bills and Rs2.6 billion 12-month bills against the demand of Rs107.2 billion for 3-month bills and Rs2.7 million for 12-month. The central banks also increased the weighted average yield on 3-month treasury bills by 24 basis points from the existing 4.70 per cent to 4.94 per cent. The yield on 12-month treasury bills was also raised by 23 basis points from 5.49 per cent to 5.72 per cent. This step has been taken by the Bank to contain inflation. Since the start of the fiscal year in July, the State Bank has been gradually increasing treasury bills yields to keep monetary expansion within limits.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended March 5, 2005, both notes in circulation and those issued increased in the week. Notes in circulation stood at Rs713,601.092 million against earlier week’s figure of Rs708,115.890 million, a rise of Rs5,485.202 million. When compared to the corresponding week a year ago when it was Rs619,411.040 million, the current week’s figure is higher by Rs94,190.052 million.

Total notes issued also rose in the current week over preceding week’s level. At Rs713,755.041 million it was larger by Rs5,419.906 million over the figure of Rs708,335.135 million recorded a week earlier. In the corresponding week last year it amounted to Rs619,556.365 million, which shows current week’s figure to be higher by Rs94,198.676 million over last year’s corresponding figure.

Approved foreign exchange declined in the week to Rs477,819.724 million or by Rs5,138.321 million over preceding week’s figure of Rs482,958.045 million. When compared to the corresponding week a year ago, when the figure was Rs504,180.805 million, the current week’s figure was smaller by Rs26,361.081 million.

Balances held outside Pakistan in approved foreign exchange rose in the week under review. It stood at Rs130,717.741 million over preceding week’s figure of Rs126,464.010 million, a rise of Rs4,253.731 million. Compared to last year’s corresponding figure of Rs132,909.468 million, the current week’s figure is lower by Rs2,191.727 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 Rs59,576.437 million similar to preceding week’s figure. The current week’s figure is larger by Rs3,900.898 million over last year’s corresponding figure of Rs55,675.539 million.

There was an inflow of Rs1,262.496 million to the industrial sector during the week under review, against preceding week’s figure of Rs1,166.982 million, a rise of Rs95.514 million. When compared to last year’s corresponding figure of Rs2,516.143 million, the current week’s figure is lower by Rs1,253.647 million.

The export sector received Rs103,353.549 million against previous week’s figure of Rs104,742.220 million, a fall of Rs1,388.671 million. Current week’s figure was larger by Rs27,842.594 million over last year’s corresponding figure of Rs75,510.955 million.

According to the weekly statement of position of scheduled banks for the week ended March 5, 2005, the sum of demand liabilities rose while time liabilities fell in the week under review. The sum total stood at Rs2,325,261 million against preceding week’s Rs2,312,805 million, a rise of Rs12,456 million. As compared to the total deposits of Rs1,924,641 million in the corresponding period last year, current week’s deposits were higher by Rs400,620 million.

During the week under review, demand deposits stood at Rs1,219,126 million, a rise of Rs17,438 million over previous week’s Rs1,201,688 million. It was also higher against last year’s corresponding figure of Rs959,109 million by Rs260,017 million.

Time deposits fell in the current week. At Rs1,106,135 million it was lower by Rs4,982 million over previous week’s Rs1,111,117 million but higher by Rs140,603 million over last year’s corresponding figure of Rs965,532 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities fell in the current week. At Rs174,306 million it was smaller by Rs1,257 million over preceding week’s Rs175,563 million. Compared to last year’s corresponding figure of Rs146,248 million, the current week’s figure is higher by Rs28,058 million.

Scheduled banks borrowings from banks abroad stood at Rs8,302 million in the current week, as against Rs5,674 million a week ago, a rise of Rs2,628 million. It was however, smaller by Rs12,506 million over last year’s corresponding figure of Rs20,808 million.

Money at call and short notice in Pakistan fell in the week under review as against previous week’s figure. It stood at Rs32,686 million, a fall of Rs108 million over preceding week’s Rs32,794 million. When compared to last year’s corresponding figure of Rs26,582 million, the current week’s figure is higher by Rs6,104 million.

Scheduled banks’ advances including bills purchased and discounted increased in the week under review. At Rs1,661,218 million it was higher by Rs4,161 million over preceding week’s Rs1,657,057 million. Compared to the corresponding figure a year ago, when advances were to the tune of Rs1,231,927 million, the current week’s advances are higher by Rs429,291 million.

Scheduled banks investment in central government securities, Treasury bills and other approved securities showed a rise in the current week when compared to preceding week’s level. Such investments amounted to Rs659,618 million, a rise of Rs12,622 million over previous week’s Rs646,996 million. Compared to last year’s corresponding figure of Rs752,047 million, the current week’s investment is smaller by Rs92,429 million.