Yields rise in Pakistan’s Treasury Bill auction, total raised amount hits PKR 997bn

In Pakistan's most recent Treasury Bill (T-Bill) auction held on February 18, 2026, the government successfully raised a total of PKR 997 billion, surpassing its target of PKR 450 billion. The auction saw strong participation, with bids totaling PKR 1,264.5 billion. This marks an increase in demand, as investors sought higher yields amidst a generally upward-moving yield curve.

The yields on Treasury Bills rose across all tenors, except for the 1-month T-bill, which saw a slight decline. The 1-month T-bill's yield decreased by 4.9 basis points (bps) to 10.1482%, down from 10.1977% recorded on February 4, 2026. Conversely, yields on the 3-month, 6-month, and 12-month T-bills experienced an increase, ranging from 8.7 to 20 bps. The 3-month T-bill yield rose to 10.2859%, while the 6-month and 12-month bills saw increases to 10.4437% and 10.5996%, respectively.

The weighted average yield, which represents the overall cost of borrowing for the government in this auction, also saw modest increases. The 3-month T-bill posted a weighted average yield of 10.2256%, up by 12.6 bps from the previous auction, while the 6-month and 12-month T-bills saw respective increases of 12.9 bps and 17.8 bps, reflecting growing investor expectations of higher returns.

Competitive bids were the dominant source of funding, with PKR 319.8 billion raised through competitive offers. In comparison, non-competitive bids amounted to PKR 677.2 billion, showing the market's strong liquidity and interest in government securities despite the upward movement in yields.

The increase in yields comes at a time when inflationary pressures and monetary policy tightening have led to rising yields across global markets. The upward movement in Pakistan’s T-bill yields signals growing investor confidence, as they seek higher returns in the face of potential market volatility and inflation risks.

This auction also represents a continuation of the government’s strategy to manage its fiscal deficit and sustain liquidity in the banking sector. The central bank has indicated that it will continue to monitor market conditions closely, ensuring adequate supply of government debt instruments to meet its financing needs. The trend of strong participation and rising yields is expected to continue, with market analysts forecasting further tightening in the yield curve if inflationary pressures persist.