On October 20, the State Bank of Pakistan injected Rs14 billion into the banking system to ease off temporary liquidity crisis and help banks to finance Eid-related withdrawals form bank deposits.

The amount was injected into the system through one-week reverse repo of Treasury bills at 4.2 per cent at an open market operation. This injection coupled with an Rs5 billion inflows through maturity of a previous OMO eased off the liquidity shortage.

On the earlier two days, the banks borrowed overnight funds from the State Bank's discount window at 7.5 per cent to meet their daily cash requirements.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended October 2, 2004, both notes in circulation and those issued increased in the week. Notes in circulation stood at Rs621,083.930 million against earlier week's figure of Rs617,931.129 million, a rise of Rs3,152.801 million. When compared to the corresponding week a year ago when it was Rs536,647.879 million, the current week's figure is higher by Rs84,436.051 million.

Total notes issued also recorded a rise in the current week over preceding week's level. At Rs621,231.825 million it was larger by Rs3,153.905 million over the figure of Rs618,077.920 million recorded a week earlier. In the corresponding week last year it amounted to Rs536,786.003 million, which shows current week's figure to be higher by Rs84,445.822 million over last year's corresponding figure.

Approved foreign exchange declined in the week, falling to Rs401,443.154 million or by Rs27,185.383 million over preceding week's figure of Rs428,628.537 million. When compared to the corresponding week a year ago, when the figure was Rs445,961.039 million, the current week's figure was lower by Rs44,517.885 million.

Balances held outside Pakistan in approved foreign exchange declined in the week under review. It stood at Rs216,485.784 million over preceding week's figure of Rs191,781.544 million, a rise of Rs24,704.24 million. Compared to last year's corresponding figure of Rs147,793.541 million, the current week's figure is substantially higher by Rs68,692.243 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 Rs58,405.281 million, similar to preceding week's figure. The current week's figure is larger by Rs3,657.386 million over last year's corresponding figure of Rs54,747.895 million.

There was an inflow of Rs2,190.341 million to the industrial sector during the week under review, against preceding week's figure of Rs2,190.840 million, a decline of Rs0.499 million. When compared to last year's corresponding figure of Rs2,699.356 million, the current week's figure is lower by Rs509.015 million.

The export sector received Rs92,591.770 million against previous week's figure of Rs89,746.022 million, a fall of Rs2,845.748 million. Current week's figure was larger by Rs29,360.477 million over last year's corresponding figure of Rs63,231.293 million.

According to the weekly statement of position of scheduled banks for the week ended October 9, 2004, the sum of demand and time liabilities further declined in the week under review. The sum total stood at Rs2,151,591 million against preceding week's Rs2,158,164 million, a fall of Rs6,573 million. As compared to the total deposits of Rs1,800,303 million in the corresponding period last year, current week's deposits were higher by Rs351,288 million.

During the week under review, demand deposits stood at Rs1,098,508 million, a rise of Rs614 million over previous week's Rs1,097,894 million. It was also higher against last year's corresponding figure of Rs874,717 million by Rs223,791 million.

Time deposits however, fell in the current week. At Rs1,053,083 million it was smaller by Rs7,187 million over previous week's Rs1,060,270 million but higher by Rs127,497 million over last year's corresponding figure of Rs925,586 million.

Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities increased in the current week. At Rs166,553 million it was larger by Rs1,617 million over preceding week's Rs164,936 million. Compared to last year's corresponding figure of Rs142,487 million, the current week's figure is higher by Rs24,066 million.

Scheduled banks borrowings from banks abroad stood at Rs4,963 million in the current week, as against Rs5,084 million a week ago, a fall of Rs121 million. It was smaller by Rs13,909 million over last year's corresponding figure of Rs18,872 million.

Money at call and short notice in Pakistan increased in the week over previous week's figure. It stood at Rs35,896 million, a rise of Rs2,625 million over preceding week's Rs33,271 million. When compared to last year's corresponding figure of Rs20,993 million, the current week's figure is higher by Rs14,903 million.

Scheduled banks' advances including bills purchased and discounted rose in the week under review. At Rs1,421,090 million it was larger by Rs5,753 million over preceding week's Rs1,415,337 million. Compared to the corresponding figure a year ago, when advances were to the tune of Rs1,074,511 million, the current week's advances are higher by Rs346,546 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 Rs737,412 million, an increase of Rs24,286 million over previous week's Rs713,126 million. Compared to last year's corresponding figure of Rs772,715 million, the current week's investment is smaller by Rs35,303 million.