On February 27, the State Bank of Pakistan sold Rs6.29 billion worth of 6 month treasury bills at 9.8024 per cent, (against 9.7269 per cent at the previous auction), Rs25.69 billion of 12 month T-bills at 10.0385 per cent (up from 9.9779 per cent previously) and Rs3.45 billion for 3-month paper at 9.4568 per cent, unchanged from the rate in the previous auction. SBP received bids worth Rs40.97 billion.

On February 29, the market witnessed shortage of funds and banks were forced to go to the central bank’s discount window.

Overnight call rates rose to 10.40 per cent, up from 9.50 per cent a day earlier and just below the 10.50 per cent discount rate at which banks borrowed Rs11.4 billion from the SBP three day repo facility.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended February 16, 2008, both notes in circulation and those issued increased in the week. Notes in circulation stood at Rs1,055.310 billion against earlier week’s figure of Rs1,054.615 billion, a rise of Rs0.695 billion. When compared to the corresponding week a year ago when it was Rs801.729 billion, the current week’s figure is higher by Rs253.581 billion.

Total notes issued also rose in the current week over preceding week’s level. At Rs1,055.477 billion it was larger by Rs0.694 billion over the figure of Rs1,054.783 billion recorded a week earlier. In the corresponding week last year it amounted to Rs801.906 billion, which shows current week’s figure to be higher by Rs253.571 billion over last year’s corresponding figure.

Approved foreign exchange decreased in the week to Rs629.514 billion or by Rs20.882 billion over preceding week’s figure of Rs650.396 billion. When compared to the corresponding week a year ago, when the figure was Rs426.398 billion, the current week’s figure is higher by Rs203.116 billion.

Balances held outside Pakistan in approved foreign exchange decreased in the week under review. It stood at Rs130.306 billion over preceding week’s figure of Rs133.725 billion, a fall of Rs3.419 billion. Compared to last year’s corresponding figure of Rs143.084 billion, the current week’s figure is smaller by Rs12.778 billion.

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 Rs49.777 billion, similar to preceding week’s figure. The current week’s figure is smaller by Rs10.931 billion over last year’s corresponding figure of Rs60.708 billion.

There was an inflow of Rs39.541 billion to the industrial sector during the week under review, a fall of Rs0.112 billion against preceding week’s figure of Rs39.653 billion. When compared to last year’s corresponding figure of Rs4.260 billion, the current week’s figure is higher by Rs35.281 billion.

The export sector received Rs96.441 billion against previous week’s figure of Rs97.461 billion, smaller by Rs1.02 billion. Current week’s figure was smaller by Rs8.829 billion over last year’s corresponding figure of Rs105.270 billion.

According to the weekly statement of position of all scheduled banks for the week ended February 16, 2008, deposits and other accounts of the scheduled banks stood at Rs3,586.486 billion, higher by Rs5.58 billion over preceding week’s figure of Rs3,580.906 billion. Commercial banks deposits showed an increase of Rs5.586 billion over the week to Rs3,574.044 billion, against preceding week’s Rs3,568.458 billion. Specialized banks deposits stood at Rs12.441 billion, against preceding week’s Rs12.447 billion, a fall of Rs0.006 billion.

Borrowings by all scheduled banks increased during the week over preceding week’s figure. It rose to Rs448.470 billion over preceding week’s figure of Rs421.235 billion, a rise of Rs27.235 billion. This was primarily due to a rise in the borrowings by commercial banks, which rose to Rs367.584 billion against previous week’s Rs340.243 billion, or by Rs27.341 billion. Borrowings by specialized banks stood at Rs80.887 billion, against preceding week’s figure of Rs80.992 billion.

Gross advances stood at Rs2,729.477 billion in the week under review, an increase of Rs17.405 billion over preceding week’s figure of Rs2,712.072 billion. Advances by commercial banks rose to Rs2,633.443 billion against earlier week’s figure of Rs2,616.257 billion, or by Rs17.186 billion. Advances of specialized banks stood at Rs96.034 billion, larger by Rs0.219 billion over earlier week’s figure of Rs95.815 billion.

Investments of all scheduled banks increased in the week by Rs19.511 billion to Rs1,161.019 billion against preceding week’s figure of Rs1,141.508 billion. Commercial banks investment rose to Rs1,147.502 billion, from earlier week’s Rs1,128.424 billion, or by Rs19.078 billion. Specialized banks investment stood at Rs13.517 billion, against preceding week’s Rs13.083 billion, larger by Rs0.434 billion.

Cash and balances with treasury banks of all scheduled banks decreased by Rs10.739 billion during the week to stand at Rs352.407 billion against earlier week’s Rs363.146 billion. The figure for commercial banks stood at Rs349.639 billion against preceding week’s figure of Rs360.371 billion, a fall of Rs10.732 billion, while of specialized banks it stood at Rs2.768 billion over previous week’s Rs2.774 billion.

Total assets of scheduled banks stood at Rs4,851.583 billion, larger by Rs24.844 billion, over preceding week’s figure of Rs4,826.739 billion. Meanwhile, commercial banks assets stood at Rs4,733.994 billion, higher by Rs24.879 billion over previous week’s figure of Rs4,709.115 billion. Specialized banks assets fell to Rs117.590 billion, or by Rs0.034 billion over previous week’s Rs117.624 billion.

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