During the week the State Bank of Pakistan lowered the weighted average yield on six-month Treasury bills and the export refinance rate, following a cut in discount rate from 9 to 7.5 per cent on November 16.
The T-bill rates were cut from 6.34 per cent to 4.76 per cent while the State Bank reduced the export refinance rate by one percentage point to 5.5 per cent for December 2002. This implies that exporters will get loans from the banks at 7 per cent in December, as against 8 per cent in November when the export refinance rate was 6.5 per cent.
On November 27, the central bank mopped up Rs24.4 billion against the target of Rs20 billion in an out-of-schedule auction of six-month and one year T-bills. There is excessive liquidity in the market. This helped the SBP attract Rs67 billion worth of bids for the T-bills at lower rates.
According to the Statement of Affairs of the State Bank of Pakistan, for the week ended November 16, 2002, both notes in circulation and those issued maintained the rise in the week under review. Notes in circulation stood at Rs511,539.046 million against earlier week’s figure of Rs505,739.539 million, showing a rise of Rs5,799.507 million. When compared to the corresponding week a year ago when it was Rs453,208.853 million, the current week’s figure is higher by Rs58,330.193 million.
Total notes issued also recorded a rise in the current week. At Rs511,730.448 million it was larger by Rs5,799.634 million over the figure of Rs505,930.814 million recorded a week earlier. In the corresponding week last year it amounted to Rs453,380.411 million, which shows current week’s figure to be higher by Rs58,350.037 million over last year’s figure.
Approved foreign exchange rose in the week to Rs.363,659.687 million, larger by Rs7,806.176 million over preceding week’s figure of Rs355,853.511 million recorded a week earlier. When compared to the corresponding week a year ago, when the figure was Rs134,690.797 million, the current week’s figure was higher by Rs228,968.89 million.
Balances held outside Pakistan in approved foreign exchange declined in the week under review. It stood at Rs44,048.623 million over preceding week’s figure of Rs49,469.481 million, showing a fall of Rs5,420.858 million. Compared to last year’s corresponding figure of Rs16,090.297 million, the current week’s figure is larger by Rs27,958.326 million.
Loans and advances of scheduled banks to the three sectors — agricultural, industrial and export show a mixed picture in the week under review. The agricultural sector received Rs54,005.026 million against last week’s Rs53,905.026 million, showing a rise of Rs100 million. The current week’s figure is smaller by Rs286.764 million over last year’s corresponding figure of Rs54,291.790 million.
There was an inflow of Rs3,246.701 million to the industrial sector during the week under review, depicting a decline of Rs11.024 million over previous week’s Rs3,257.725 million. When compared to last year’s corresponding figure of Rs3,931.238 million, the current week’s figure is lower by Rs684.537 million.
The export sector received Rs50,495.490 million over previous week’s figure of Rs50,478.198 million, showing a rise of Rs17.292 million. Current week’s figure was lower by Rs2,499.52 million over last year’s corresponding figure of Rs52,995.010 million.
According to the weekly Statement of Position of scheduled banks for the week ended November 16, 2002, the sum of demand and time liabilities rose in the week under review as against a decline a week earlier. The sum stood at Rs1,553,617 million, showing a rise of Rs22,953 million over preceding week’s figure of Rs.1,530,664 million. As compared to the total deposits of Rs1,289,184 million in the corresponding period last year, the current week’s deposits were higher by Rs264,433 million.
During the week under review, demand deposits declined by Rs9,862 million to Rs699,489 million, over previous week’s figure of Rs709,351 million, but was higher against last year’s corresponding figure of Rs624,098 million by Rs75,391 million. In the week, time liabilities increased. It rose by Rs33,815 million to Rs854,128 million against preceding week’s Rs821,313 million. Compared to last year’s corresponding figure of Rs665,086 million, the current week’s figure is higher by Rs189,042 million.
Scheduled banks borrowings from the State Bank of Pakistan against promissory notes and other approved securities declined in the current week. At Rs136,262 million it was lower by Rs1,714 million over preceding week’s Rs137,976 million. Compared to last year’s corresponding figure of Rs123,477 million, the current week’s figure is higher by Rs12,785 million.
Scheduled banks borrowings from banks abroad stood at Rs14,631 million in the current week, as against Rs16,357 million a week ago, showing a fall of Rs1,726 million. It was also lower by Rs919 million over last year’s corresponding figure of Rs15,550 million.
Money at call and short notice in Pakistan fell in the week under review. It stood at Rs41,184 million, showing a decline of Rs2,508 million over preceding week’s Rs43,692 million. When compared to last year’s corresponding figure of Rs51,554 million, the current week’s figure was lower by Rs10,370 million. Scheduled banks advances including bills purchased and discounted, maintained the rise in the week under review. At Rs968,692 million it was larger by Rs8,554 million over preceding week’s figure of Rs960,138 million. Compared to the corresponding figure a year ago, when advances were to the tune of Rs946,984 million, the current week’s advances are higher by Rs21,708 million.