KARACHI, March 19: Yields on three- and 12-month Pakistan treasury bills fell sharply at an auction on Wednesday but dealers said they expected overnight money market rates to remain largely stable.

The State Bank of Pakistan (SBP) said it sold Rs40.23 billion of three- and 12-month Treasury bills at the auction. The total comprised Rs23.01 billion of 12-month paper and Rs17.22 billion of three-month bills.

The bank said the weighted average annual yield on 12-month bills fell to 2.6588 per cent from 3.6012 at the last sale of 12-month paper on February 19.

The cut-off for accepted bids on the 12-month T-bill was set at 2.7508 per cent, against 3.6046 per cent at the last auction.

Bankers said the decline was expected in line with a drop in the benchmark six-month bill cutoff yield, which fell to 2.1691 per cent from 3.3646 per cent at an auction two weeks ago.

The bank said it received bids worth over Rs107.1bn against a pre-auction target of Rs40bn.—Reuters