Govt raises Rs1.92 trillion through treasury bill auction as yields fall

The government raised Rs1.92 trillion through the auction of market treasury bills on Wednesday, while yields declined across all tenors.

The amount raised was lower than the pre-auction target of Rs2.4 trillion. Total participation in the auction stood at Rs4.28 trillion.

The one-month treasury bill cut-off yield fell by 40 basis points to 11.3968%. The three-month paper declined by 35 basis points to 11.3978%, while the six-month yield dropped by 31 basis points to 11.4375%. The 12-month treasury bill yield also fell by 35 basis points to 11.488%.

Analysts said the auction reflected market expectations that the monetary tightening cycle has ended and that the next policy move could be towards easing.

Pakistan’s consumer price index inflation stood at 11.1% year-on-year in June, down from 11.7% in May and within the government’s projected range of 11% to 12%.

The State Bank of Pakistan kept its benchmark interest rate unchanged at 11.5% in June, balancing inflation pressures from the Middle East conflict against slowing economic activity.