KARACHI, Aug 13: Banks on Wednesday avoided blocking their liquidity for longer period by investing in Treasury bills of 6-month and 12-month tenure.

In the T-bill auction the SBP received massive amount for 3-month bills but there was no bid for 6-month and just Rs51 million bids for 12-month tenure were received.

The SBP sold T-bills of 3-month for Rs35.9 billion with a slight higher cut-off yield of 12.29 per cent against 12.19 per cent. It received total bids of Rs39.257 billion for 3-month.

The small bids of Rs51 million for 12-month T-bills were rejected by the State Bank.

Bankers said that despite good return on Treasury bills, the banks were not ready to invest their money for longer period.

They said it was risky engaging liquidity for longer periods in the wake of higher inflation and deteriorating economic situation.