Pakistani money market's illiquidity drags on
KARACHI, May 4 (Reuters) Pakistani banks were forced to the central bank's discount window on Thursday due to persistent illiquidity in the interbank market.
Banks borrowed 5.475 billion rupees from State Bank of Pakistan's three-day repo facility -- the discount window -- as overnight call money rates remained just below the 9.0 percent discount rate.
So far this week banks have borrowed 13.94 billion rupees through the discount window. Last week the amount totalled 41.93 billion rupees.
''There was an outflow of 6.75 billion rupees today, which put further pressure on the already tight market,'' said a dealer at brokers Elixir Securities.
Dealers said the market will stay tight for all of May, and banks are expected to keep coming back to the discount window.
''The borrowing in the next couple of days will rise as banks would need funds to meet their weekly reserve requirements,'' said another dealer.
Dealers said they also expected the central bank to inject funds through reverse repos in the near term to support the market.
In the currency market, the Pakistani rupee ended flat at 60.05/07 to the dollar, but dealers expected it to ease in the coming days due to rising demand for import payments.
Dealers said they expected the rupee to trade in a range of 60.00 and 60.10 in the near term.
Thursday Previous Interbank market 60.05/07 60.05/07 Open market 60.18/23 60.18/23 For Karachi Interbank Bid Rates: click on page Revaluation rates by Financial Market Association for Treasury Bills, PIBS, FIBs Holding: click on page Revaluation rates by banks for PIBs: click on For Treasury Bonds chain: click on page <0#PKTSY> REUTERS SBJ DS1545