Govt raises Rs1.9 trillion in T-bill auction ahead of SBP policy decision

The government raised Rs1.902 trillion in realised value through an auction of Market Treasury Bills (MTBs) on Wednesday, with yields showing a mixed trend ahead of the State Bank of Pakistan's monetary policy announcement next week.

According to auction results, the government raised Rs1.962 trillion in face value against a target of Rs2 trillion. The amount exceeded the maturity of Rs1.835 trillion, while total participation in the auction stood at Rs4.63 trillion.

The cut-off yield on the one-month T-bill declined by 4 basis points to 12.1892%. The six-month yield also fell marginally by 1 basis point to 12.4999%.

In contrast, the yield on the three-month paper increased by 1 basis point to 12.4988%, while the 12-month yield rose by 40 basis points to 12.9895%.

Separately, the government rejected bids received in the auction of floating-rate Pakistan Investment Bonds (PIBs).

The auction took place ahead of the State Bank of Pakistan's Monetary Policy Committee meeting scheduled for Monday.

Market participants remain divided over the direction of interest rates, with uncertainty driven largely by volatile global energy prices and tensions in the Middle East. Some analysts expect a further increase in the policy rate, while others anticipate no change.

The central bank last raised its benchmark policy rate by 100 basis points to 11.5% in April.