The government successfully raised Rs562 billion through the auction of market treasury bills (T-bills) on Wednesday, with the yields remaining largely unchanged as investors await the central bank’s interest rate decision next week.
The amount raised fell short of the maturing amount of Rs698 billion but exceeded the pre-auction target of Rs400 billion. A total of Rs1.505 trillion was bid for the T-bills during the auction.
The cut-off yield for one-month T-bills decreased by 17 basis points to 12.1492%, while the yield on three-month T-bills remained steady at 12.0098%. Yields for six-month T-bills fell by 1 basis point to 11.9998%, while yields for 12-month T-bills stayed flat at 12.01%.
In addition, the government raised Rs321 billion through the sale of Pakistan Investment Bonds (floater), which received a participation of Rs1.537 trillion, surpassing the target of Rs150 billion.
Furthermore, Rs105.23 billion was raised from the sale of Ijarah Sukuk at the Pakistan Stock Exchange (PSX).
Analysts anticipate the State Bank of Pakistan (SBP) will lower interest rates by 50-100 basis points during its upcoming policy meeting on Monday.
According to AKD Securities, the expected rate cut is driven by factors such as high real interest rates, a record-high current account surplus, and the approval of funds by the International Monetary Fund (IMF), despite sluggish economic activity.
Inflation in April is projected to ease to 0.6% year-on-year, marking a six-decade low, down from 0.7% in the previous month, largely due to a decline in food, transport, and housing costs.
