KARACHI: The government raised Rs822.8 billion through T-bills as against the target of Rs600bn — representing an excess borrowing of Rs208.8bn, reported the State Bank of Pakistan (SBP) on Wednesday.
This was unlike the previous auction held on October 23 where the government received bids of Rs1,963bn but raised Rs532.5bn.
However, investors in the current auction were more interested in short term T-bills, suggesting close eyes on any possible adjustment in key rate in the upcoming monetary policy in November.
In the previous monetary policy, SBP had decided to keep the interest rate unchanged at 13.25 per cent.
Investors offered Rs902.4bn for three-month bills - the highest amount offered for the auction of shortest tenure while the government raised Rs504.8bn for short-term instruments.
The bidders offered Rs318bn for six-month bills while Rs292.3bn was offered for year-long instrument. For the former, the government raised Rs221.2bn and Rs96.6bn for the latter.
The cut-off yields for three- and six-month papers were 13.29pc and 13.28pc, respectively while it stood at 12.79pc for the for 12-month instrument.
The government has been increasing its borrowings to meet expenses as it has been unable to meet revenue collection targets SBP funding has been put on hold as well.
Published in Dawn, November 7th, 2019