KARACHI: Bids for 12-month papers on Wednesday’s treasury auction reached over Rs988 billion as the government raised Rs551.5bn from 12-month papers.
The 12-month papers offered highest return compared to three-month and six-month instruments.
Despite large interest, the government did not raise the targeted amount from the auction but still managed to mop up higher funds than the maturity amount for the same date.
The government raised Rs403bn from 12-month papers against bids worth Rs988bn. The return on the one-year paper was at 13.84 per cent compared to 13.83pc and 13.73pc for six- and three-months papers respectively.
Recently, the State Bank of Pakistan (SBP) said the average inflation for FY20 would be in the range of 11-12pc which means the interest rate may not fall sharply. However, even at this rate, banks were willing to park maximum liquidity in the 12-month instruments.
During 1QFY20, the private sector credit off take was negative whereas so far, the private sector has been retiring debts instead of borrowing more funds.
