The State Bank has invited tenders for big sale of Treasury Bills on Wednesday to offset the impact of scheduled Rs 85 billion liquidity inflow.
The liquidity-starved market kept waiting for intervention by State Bank last week but it restrained itself while high money market rates kept prevailing in inter-bank and the banks had to go for discounting every day.
The State Bank has set Rs 60 billion as Wednesday's T-bills auction target. Market sources said that the State Bank has invited T-bills of such a huge amount in the wake of Rs 85 billion inflows due on September 30.
The market faced another day of high overnight rate of 7.4 percent on Monday. Throughout the past week the overnight rate had remained at 7.4 percent.
During the whole week, banks were inclined to cover their positions in shorter tenors and went for Rs 70 billion discounting.
Market experts said that the SBP might not raise the amount it has fixed as the banks might go for higher rates which may not be acceptable to SBP.