Govt raises Rs1.339 trillion in T-bill auction as yields climb after SBP rate hike

The government raised Rs1.339 trillion in realised value through an auction of Market Treasury Bills on Wednesday, exceeding the target of Rs650 billion as yields moved higher following the State Bank of Pakistan’s policy rate increase.

The auction attracted total participation of Rs4.25 trillion, with Rs1.374 trillion accepted on a face value basis.

Yields rose across all tenors, with the one-month cut-off rate increasing by 78 basis points to 11.4785%. The three-month yield rose by 40 basis points to 11.8398%, while the six-month paper saw an increase of 83 basis points to 11.9801%. The 12-month yield increased by 21 basis points to 12.0999%.

The increase in yields comes after the SBP raised its policy rate by 100 basis points to 11.5% earlier this week, its first hike in nearly three years, citing inflation risks linked to the Middle East conflict.