June 08, 2006	Thursday	Jumadi-ul-Awwal 11, 1427

KARACHI, June 7: The State Bank on Wednesday increased the cut-off yield on benchmark six-month T-bills, which was about five years high.

After nine months, the SBP changed the T-bills rates and increased the six-month rate by 15 basis points to 8.4433 per cent. It increased the three-month T-bills rate by 22 basis points to 8.3256 per cent. The central bank received total bids of Rs31.735 billion against the pre-auction target of Rs21 billion.

The SBP sold Rs575 million of six-month bills, Rs1.506 billion of three-month and Rs23.629 billion of 12-month bills.

Analysts said the rates were increased because investors had lost interest in the papers.

Salman Jafri, a researcher at JS brokerage houses, said the central bank brought the yields of three and six-month T-bills at par with the secondary market rates.

The analysts said the increase was in accordance with the market expectation, as most of the investments were going towards the 12-month paper which offered much better return.