The State Bank of Pakistan (SBP) raised Rs 1.09 trillion in short-term debt via a treasury bills (T-bills) auction held on Wednesday. This was higher than the target of Rs 900 billion, which the central bank had set for debt maturity of Rs 783 billion.
Tenders for the sale of three-month, six-month and 12-month T-bills were invited by SBP through primary dealers on October 18, for settlement the next day. According to the results shared by the SBP, bids amounting to Rs 1.69 trillion were received for the shortest tenor, while bids for the six-month and 12-month tenors stood at Rs 425 billion and Rs 2.15 trillion, respectively.
According to data compiled by brokerage house JS Global Capital, this was the highest-ever amount of bids received for the longest tenor.
The cut-off yield — the highest interest accepted — for the three-month T-bills was 22.2% while that for the six-month and 12-month tenors was 22.39% and 22.4% respectively. This was a decline of 35 basis points (bps), 45 bps, and 44 bps, respectively from cut-off yields in the previous auction held on October 4.
According to brokerage house Topline Securities, the slight decline can be attributed to market expectations that the SBP’s Monetary Policy Committee will maintain the policy rate at 22% in its next meeting scheduled on October 30.
SBP data showed the government raised the highest amount via the sale of 12-month T-bills i.e. Rs 931.29 billion. Meanwhile, Rs 50.75 billion and Rs 110.39 billion were raised through six-month and 12-month T-bills, respectively.
The next T-bills auction will be held on November 1, through which the government aims to raise Rs 975 billion for debt maturity of Rs 1.29 trillion.
