KARACHI, Nov 5: The State Bank of Pakistan raised its three-month Treasury bill cut-off yield by 97 basis points to 13.5313 per cent on Wednesday, which analysts said was an indication of an interest rate rise in coming days.

The cut-off yield on the three-month Treasury bills was 12.5631 per cent in an auction on October 22.

The weighted average yield on the three-month paper came at 12.9066 per cent at Wednesday’s auction, up from 12.5625 per cent on October 22, the central bank said.

“The rise in the T-bill yield clearly manifests a further tightening of monetary stance. We expect the central bank to increase its policy rate by at least 150 to 200 basis points,” said Asif Qureshi, head of research at Invisor Securities Ltd.

Qureshi said monetary tightening may be a prerequisite for securing an International Monetary Fund (IMF) programme.

Pakistan is facing a balance-of-payments crisis and has a few weeks to raise billions of dollars in foreign loans to meet debt payments and pay for imports.

The IMF and Pakistan are discussing terms and conditions of assistance but the government still hopes friendly governments such as Saudi Arabia will come to its financial rescue.

A government official told Reuters last week the IMF had said Pakistan would need to raise its benchmark discount rate, now at 13 percent, by 3.5 to 4.0 percentage points.

Pakistan had asked the IMF to agree to put off any interest rate increase at least until January, the official said.

The rupee ended firmer at 80.90/81.10 to the dollar on Wednesday, compared with Tuesday’s closing of 81.35/45. Dealers said there were no import payments and a few inflows.—Reuters