On March 25, the State Bank of Pakistan pumped Rs22.8bn into the banking system at 9.85 per cent. The injection of liquidity supported the market, and helped ease the rates.

For the auction on March 26, the State Bank had set a target of Rs45bn. It however, sold T-bills of 12 month maturity worth Rs9 million at a rate of 10.12 per cent.

On the following day, the SBP sold Rs21.9 bn of T-bills under four day repo contracts at 9 per cent to mop up funds inflow from Rs49 bn maturing government securities.

On March 28, the central bank sold Rs18.55 bn of T-bills under three-day repo contracts at 8.75 per cent to mop up funds from the money market.

According to the Statement of Affairs of the State Bank of Pakistan, for the week ended March 15, 2008, both notes in circulation and those issued increased in the week. Notes in circulation stood at Rs1,063.167 bn against earlier week’s figure of Rs1,062.024 bn, a rise of Rs1.143 bn. When compared to the corresponding week a year ago when it was Rs893.535 bn, the current week’s figure is higher by Rs169.632 bn.

Total notes issued also increased in the current week over preceding week’s level. At Rs1,063.358 bn it was larger by Rs1.202 bn over the figure of Rs1,062.156 bn recorded a week earlier. In the corresponding week last year it amounted to Rs893.678 bn, which shows current week’s figure to be higher by Rs169.68 bn over last year’s corresponding figure.

Approved foreign exchange decreased in the week to Rs593.370 bn or by Rs2.491 bn over preceding week’s figure of Rs595.861 bn. When compared to the corresponding week a year ago, when the figure was Rs582.881 bn, the current week’s figure is higher by Rs10.489 bn.

Balances held outside Pakistan in approved foreign exchange decreased in the week under review. It stood at Rs152.643 bn over preceding week’s figure of Rs167.023 bn, a fall of Rs14.38 bn. Compared to last year’s corresponding figure of Rs130.480 bn, the current week’s figure is larger by Rs22.163 bn.

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 bn, similar to preceding week’s figure. The current week’s figure is smaller by Rs10.406 bn over last year’s corresponding figure of Rs60.183 bn.

There was an inflow of Rs40.902 bn to the industrial sector during the week under review, a fall of Rs0.08 bn against preceding week’s figure of Rs40.982 bn. When compared to last year’s corresponding figure of Rs41.612 bn, the current week’s figure is smaller by Rs0.71 bn.

The export sector received Rs90.548 bn against previous week’s figure of Rs94.213 bn, smaller by Rs3.665 bn. Current week’s figure was smaller by Rs43.653 bn over last year’s corresponding figure of Rs134.201 bn.

According to the weekly statement of position of all scheduled banks for the week ended March 15, 2008, deposits and other accounts of the scheduled banks stood at Rs3,615.339 bn, smaller by Rs3.007 bn over preceding week’s figure of Rs3,618.346 bn. Commercial banks deposits showed a decrease of Rs3.01 bn over the week to Rs3,602.535 bn, against preceding week’s Rs3,605.545 bn. Specialised banks deposits stood at Rs12.804 bn, against preceding week’s Rs12.801 bn, a rise of Rs0.003 bn.

Borrowings by all scheduled banks increased during the week over preceding week’s figure. It rose to Rs423.157 bn over preceding week’s figure of Rs393.974 bn, a rise of Rs29.183 bn. This was primarily due to a rise in the borrowings by commercial banks, which rose to Rs342.108 bn against previous week’s Rs313.095 bn, or by Rs29.013 bn. Borrowings by specialized banks stood at Rs81.050 bn, against preceding week’s figure of Rs80.880 bn.

Gross advances stood at Rs2,782.250 bn in the week under review, an increase of Rs25.791 bn over preceding week’s figure of Rs2,756.459 bn. Advances by commercial banks rose to Rs2,685.460 bn against earlier week’s figure of Rs2,659.862 bn, or by Rs25.598 bn. Advances of specialized banks stood at Rs96.791 bn, higher by Rs0.193 bn over earlier week’s figure of Rs96.598 bn.

Investments of all scheduled banks decreased in the week by Rs1.204 bn to Rs1,152.562 bn against preceding week’s figure of Rs1,153.766bn. Banks investment fell to Rs1,138.725bn, from earlier week’s Rs1,140.200bn, or by Rs1.475 bn. Specialized banks investment stood at Rs13.838 bn, against preceding week’s Rs13.566 bn, higher by Rs0.272 bn.

Cash and balances with treasury banks of all scheduled banks decreased by Rs13.858 bn during the week to stand at Rs346.798 bn against earlier week’s Rs360.656bn.