January 31, 2006	Tuesday	Muharram 1, 1427

KARACHI, Jan 30: The State Bank on Monday set Rs13 billion as auction target for treasury bills but a little hope regarding the increase in cut-off yield was found in the market.

The market witnessed a significant liquidity presence that eased up the overnight rate ranging from six to 6.5 per cent. The SBP has been moping up liquidity to maintain its tight monetary policy and kept the overnight rate high.

Experts said the central bank might exceed from its target of Rs13 billion as an inflow of Rs13.5 billion was scheduled, while the market was in access of Rs8 billion. “Primary dealers will certainly opt for higher buying of T-bills with the same cut-off yield and most of the bids were expected to come for one year maturity,” said an analyst.

The SBP would sell T-bills of three maturities — three-month, six-month and 12-month. The market was firm that there was no chance for any change in the cut-off yield.