KARACHI: The State Bank of Pakistan (SBP) has reported that the government raised Rs274.7 billion through T-bills, against the target of Rs400 billion.
The SBP conducted the auction for the sale of 3-month, 6-month and 12-month Government of Pakistan Market Treasury Bills (MTBs), and received bids amounting to over Rs1.1 trillion.
Bids worth Rs695.4 billion were received for 3-month T-bills, Rs148.1 billion for 6-month T-bills while 12-month government papers fetched bids amounting to Rs269.4 billion.
Out of the received bids, the federal government raised Rs170.4 billion from 3-month bids, Rs22.3 billion from 6-month T-bills, and Rs82 billion from 12-month T-bills.
The total acceptance in the auction, including non-competitive bids, was Rs327.1 billion.
Most of the bidding was concentrated in the short term 3-month T-bills, reflecting a possible anticipation of a policy rate cut.
The current interest rate has remained stubbornly at 13.25pc since July 16, 2019, despite speculation in the subsequent months that there would be a rate cut.
Most recently, the government has hinted at a potential cut at the end of January.
However, the SBP has been relying on the high-interest rate, as foriegn investment has dramatically increased in the last few months. Delaying a rate cut has been part of the SBP’s recent effort to attract ‘hot’ money.
According to the state bank, foreign investment in T-bills in cumulative net inflows Special Convertible Rupee Accounts (SCRA) surged to $1.7 billion between July 2019 and January 2020.
The next auction date for T-bills is set for January 28, with a target amount of Rs500 billion.
