KARACHI: The State Bank of Pakistan (SBP) has reported that the government raised Rs388 billion through T-bills, exceeding the target set of Rs300 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 Rs1,380 billion.
Bids worth Rs250.6 billion were received for 3-month T-bills, Rs4 billion for 6-month T-bills while 12-month government papers fetched bids amounting to Rs1,126.4 billion.
Out of the received bids, the federal government raised Rs131 billion from 3-month bids, Rs2 billion from 6-month T-bills and Rs255 billion from 12-month T-bills.
The total acceptance in the auction, including non-competitive bids, was Rs450.3 billion.
The cut-off yield for 3-month bids was 13.39pc and 13.33pc for 12-months; both yields slightly decreased from the last treasury bill auction.
However, the cut-off yield for 6-month bids increased to 13.34pc.
Unusually, most of the bidding was concentrated in the long term 12-month T-bills, showing that investors are willing to commit to long term instruments.
This is unlike the last few auctions of MTBs, where most of the bidding has been concentrated in the short term 3-month T-bills.
Previously, the bidding pattern in short term bills had indicated possible anticipation of a policy rate cut. But as the current interest rate has remained stubbornly at 13.25pc since July 16, 2019, and inflation hit an all-time high in January, the interest rate is unlikely to fall anytime soon. Analysts expect a policy rate cut in the latter half of the year.
The next auction date for T-bills is set for March 11, with a target amount of Rs300 billion.
