KARACHI: The State Bank of Pakistan (SBP) has reported that the government raised Rs167.3 billion through T-bills, against the auction target of Rs325 billion.
The SBP conducted the auction for the sale of 3-month, 6-month and 12-month Government of Pakistan Market Treasury Bills (MTBs) and received bids amounting to over Rs1,103 billion.
Bids worth Rs323.8 billion were received for 3-month T-bills, Rs270.1 billion for 6-month T-bills, while 12-month government papers fetched bids amounting to Rs508.8 billion.
Out of the received bids, the federal government raised Rs26.8 billion for 3-months, Rs50 billion for 6-months and Rs90.5 billion for 12-months.
The total acceptance in the auction, including non-competitive bids, was Rs225.3 billion.
This is the first T-bill auction to take place after the policy rate was cut from 9pc to 8pc on May 15. The central bank aggressively cut interest rates in the last three months, slashing the policy rate from 13.25pc to 12.5pc on March 17, from 12.5pc to 11pc on March 24, from 11pc to 9pc on April 16, and finally from 9pc to 8pc on May 15.
But despite the policy rate falling to 8pc, the cut-off yields for all bids did not significantly change from the yields in the previous auction on May 6. According to some analysts, it could be that the anticipated cut was preemptively reflected in the cut-off yields in the May 6 auction.
The cut-off yield for 3-month bids was at 8.14pc, down from 8.38pc. The yield for 6-month bids was at 7.8pc, down from 7.9pc, while the yield for 12-month bids stood at 7.74pc, up from 7.75pc.
The bidding was more concentrated in the long term 12-month papers. This is opposed to the trend that defined most of last year and the beginning of this year, of investing in short term 3-month T-bills.
The next auction date for T-bills is set for June 3, with a target amount of Rs325 billion.
