The government secured Rs452 billion through the latest Treasury bill auction, marginally surpassing its target of Rs450 billion, despite the State Bank of Pakistan’s (SBP) recent 100-basis-point rate cut and declining inflation.
The auction attracted Rs918 billion in total bids, with the three-month T-bill cut-off yield rising by 21bps to 11.79 percent. The yield for the six-month paper increased by 10bps to 11.5 percent, while the 12-month yield climbed 24bps to 11.59 percent.
Market analysts attributed the increase in yields to adjustments following the SBP’s smaller-than-expected rate reduction.Â
The SBP’s policy rate currently stands at 12 percent. Analysts had projected a rate cut exceeding 150bps, but the central bank opted for a more cautious approach.Â
Meanwhile, Pakistan’s inflation dropped to 2.4 percent year-on-year in January, marking its lowest level in over nine years after recording 4.1 percent in December.
