KARACHI, Aug 17: Yields on six-month Treasury bills rose slightly on Wednesday, in line with market expectations, but dealers said call rates would slide as the State Bank had left the market flush with funds.

The cut off yield of six-month paper rose to 8.1388 per cent from 8.0954 per cent at the previous sale on August 3, the central bank said. The weighted average annual yield on the paper also rose to 8.1056 per cent from 8.0231 per cent.

The State Bank said the cut-off yield on the three-month T-bills rose to 7.9197 per cent from 7.8297 per cent. The weighted average annual yield on the paper also rose to 7.8436 per cent from 7.7488 per cent previously.

The cut-off yield for the 12-month T-bill remained unchanged at 8.7907 per cent, while its weighted average annual yield rose to 8.7865 per cent from 8.6986 per cent. The central bank said it sold Rs2.667 billion ($45 million) of six-month bills, Rs8.864 billion ($149 million) of three-month bills, and Rs2.620 billion ($44 million) of the 12-month paper.

Dealers said the increase in yields in medium-term paper signalled efforts by the central bank to deal with rising inflation. Pakistan’s consumer price index rose 8.99 percent in the year through July on higher food supplies and petroleum prices.

Only Rs10.83bn worth of bids were submitted for the 12-month paper and Rs12.55bn for the six-month paper, against Rs26.68bn for three-month paper. Overnight rates closed at 8.5pc compared with the previous close of 8.9 per cent.—Reuters