November 23, 2006	Thursday	Ziqa'ad 1, 1427

KARACHI, Nov 22: The State Bank of Pakistan kept cut-off yields unchanged on treasury bills in an auction held on Wednesday, suggesting that there was no sign of easing of tight monetary policy in the near-future.

The heavy investment in 12-month bills was also in line with the market expectations reflecting the investors’ confidence over the stability of interest rate scenario.

The SBP managed to sell treasury bills worth Rs60.680 billion close to its target of Rs64 billion. It, however, raised Rs52.783 billion for 12-month bills at a cut-off yield of 9.00046 per cent.

Analysts said that it was expected that massive investment would be made in the longest tenure t-bills.

The SBP raised Rs6.039 billion for six-month papers at a cut-off yield of 8.814 per cent and Rs1.862 billion for three-month bills at 8.641 per cent.

They said that the latest inflation figures suggested that there was no need to increase the T-bills yields checking further rise in interest rates. They said it was a stable situation especially in the wake of slight fall in CPI and significant decline in core inflation.