Pakistani o/n rates firm, banks go for discounting

KARACHI, June 9 (Reuters) Pakistan's short-term rates remained firm on Friday because of steady demand for fund and banks borrowed more than 15 billion rupees from the central bank's discount window, dealers said.

Overnight call rates ended at the top rate of 8.9 percent, unchanged from the previous close.

''Liquidity remained tight as banks need funds to meet their weekly reserve requirements,'' a dealer said.

Pakistani banks are required to keep a minimum of 5.0 per cent of their cash reserves with the central bank over the weekend.

Dealers said they expected rates to remain firm in the short-term but they could ease by the end of the next week as inflows of about 40 billion rupees from maturing government paper were due.

In case of a tight market, banks can borrow through the central bank's three-day repo facility at a discount rate of 9.0 percent.

In the currency market, the Pakistani rupee closed at 60.16/17 to the dollar, down from 60.10/12 on Thursday.

Dealers said the rupee could face slight downward pressure in coming days as import payments were expected to rise towards the end of the fiscal year on June 30.

The rupee hit a 19-month low last month but has since recovered on improved dollar supplies.

Friday Previous Interbank market 60.16/17 60.10/12 Open market 60.52/57 60.45/50 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 REUTERS PV PM1723