T-bill yields fall as govt raises Rs1.158trn in auction

The government raised Rs1.158 trillion in realised value through the auction of market treasury bills on Tuesday, as yields declined across all tenors.

In face value terms, the government raised Rs1.242 trillion against a target of Rs1.20 trillion. The auction had a maturity of Rs1.121 trillion, while total participation stood at Rs3.08 trillion.

The one-month T-bill cut-off yield fell by 39 basis points to 11.7997%.

The three-month paper saw its cut-off yield decline by 75 basis points to 11.7499%, while the six-month yield dropped by 74 basis points to 11.7479%.

The 12-month T-bill yield recorded the sharpest decline, falling by 115 basis points to 11.8381%.

In its monetary policy statement, the central bank said the Monetary Policy Committee had weighed inflationary pressures from the Middle East conflict against slowing economic activity.

The SBP said inflation pressures had increased directly through higher domestic energy prices and indirectly through rising transportation and production costs.

The central bank said these pressures contributed to an increase in core inflation to 8.2% in April and 8.7% in May.

Headline inflation rose from 7.3% year-on-year in March to 10.9% in April and 11.7% in May.

The SBP said the Monetary Policy Committee expected inflation to remain in double digits for the next few months before gradually easing.