Govt borrows Rs1.67tr against maturity of Rs1.39tr

KARACHI: The State Bank of Pakistan (SBP) raised Rs 1.67 trillion against a target of Rs 1.35 trillion. This is against debt maturity of Rs 1.39 trillion. 

Participation in the auction remained large with bids cumulating Rs 2.286 trillion.

Cut-off yields, however, have remained largely flat. The 3-month cut-off yields for Market Treasury Bills (MTB) at 16.9999%. The yields for the 6-month MTBs rose 10bps to 16.8999%; while the 12-month MTB yields fell 4bps to 16.8%.

“Huge participation was seen today as total amount stood at Rs2.3trn where participation was skewed towards 3-months,” says Topline Research in a T-Bill Auction Alert.

“This indicates that money market participants are still eyeing a possibility of interest rate hike going forward and are reluctant to take exposure in longer tenor,” adds the alert. 

JPMorgan, in its ‘Asia Pacific Economic Research’ on December 5, 2022, had said it was penciling “in another 400bps of hikes, bringing the policy rate to 20% by end-FY23”.

Earlier in November during the last MTB auction; the government raised Rs 215 billion against the participation of Rs 646 billion. Debt of Rs 855 billion matured while the government eyed a target of Rs 850 billion.