In a recent auction on Tuesday, the State Bank of Pakistan (SBP) achieved a notable success by selling Market Treasury Bills (MTBs) worth Rs63.84 billion for durations of 3, 6, and 12 months. Despite a target set at Rs480 billion, the SBP efficiently managed to secure substantial bids.
The cut-off yields for the respective periods stood at 20.4399%, 20.3951%, and 20.0800%. There was a significant decline of 6 basis points (bps) and 15 bps in the 3-month and 12-month categories, while the yield for the 6-month papers remained stable.
Out of a total amount offered, the SBP accepted Rs64 billion, reflecting a strong market response. The bids received were Rs482.66 billion for 3 months, Rs80.29 billion for 6 months, and Rs589.88 billion for 12 months. The SBP accepted Rs17.53 billion for 3 months and Rs5 billion for 12 months from the respective categories.
Furthermore, the SBP acquired Rs41.31 billion from the non-competitive auction, contributing to the total accepted amount of Rs64 billion. The bid-to-cover ratio, illustrating the ratio of bids received to the amount sold, experienced a significant rise, reaching 18.06 compared to 6.24 in the previous auction. In essence, the SBP accepted approximately 5.54% of the total bids received.
In the last auction on January 10, 2024, the SBP sold MTBs worth Rs185 billion against a target of Rs225 billion, with cut-off yields of 20.4997%, 20.4%, and 20.2298% for 3, 6, and 12 months, respectively. The recent success reflects the continued confidence of investors in the financial instruments offered by the State Bank of Pakistan.
