The federal government raised Rs664 billion through the latest Treasury Bill (T-Bill) auction, surpassing its auction target of Rs550 billion, though falling short of the Rs716 billion in maturing debt, according to Muhammad Sohail, CEO of Topline Securities, citing data released by the State Bank of Pakistan (SBP).
The auction attracted robust participation, with total bids amounting to Rs1,988 billion—reflecting continued strong demand for short-term, risk-free government securities. Despite the healthy bid volume, the government chose to accept a limited portion, possibly indicating rate management or debt rollover strategy.
Yields across all tenors fell significantly, dropping between 66 and 90 basis points compared to the previous auction. The cut-off yield for the 1-month T-Bill declined to 11.25%, while the 3-month and 6-month papers settled at 11.24% and 11.28%, respectively. The 12-month T-Bill yield stood at 11.35%.
The sharp decline in yields suggests increasing market expectations of monetary easing in the near term, as well as growing investor confidence in short-term instruments. However, the fact that the government raised less than the maturing amount may signal caution about locking in funds at lower rates.
