KARACHI, Sept 28: The yields on treasury bills remained flat at an auction on Wednesday, and bankers said with inflationary pressures easing, the central bank was unlikely to increase the rates.
Both the cut-off yield and the weighted average yields on the benchmark six-month T-bills remained unchanged at 8.1388 per cent at the auction, the central bank said.
The State Bank of Pakistan also kept the cut-off yield on the three-month and 12-month T-bills unchanged at 8.1000 per cent and 8.7907 per cent, respectively.
The weighted average annual yield on the three-month paper also remained flat at 8.1000 per cent, however, the average yield on the 12-month paper fell slightly to 8.7896 per cent from 8.7907 per cent previously.
“The CPI (Consumer Price Index) number for August showed inflation was easing, so there was no reason for the central bank to increase the rates,” said a dealer at a foreign bank.
“The State Bank has traditionally been reactive, rather than pre-emptive, so it was expected that rates would remain at current levels,” he said.
The CPI inflation dipped to 8.41 per cent in August year-on-year from 8.99 per cent in July.
Mohammed Sohail, director research at Jahangir Siddiqui Capital Markets, said rates were expected to remain stable.
“It is a clear sign that the rates are stabilizing at the current levels as inflationary pressures are easing,” he said.
The bank said it sold Rs144.15 million of six-month bills, Rs3.077 billion of three-month bills, and Rs5.011 billion of the 12-month paper.
It received total bids worth Rs44.185 billion, less than a combined pre-auction target of Rs50 billion.—Reuters
