KARACHI: The government on Wednesday raised over Rs1.519 trillion through auction of market treasury bills, but most of the amount was borrowed for the three-month tenure.
The government received the highest bids of Rs1,538 billion for three-month T-bills and accepted Rs1,130.68bn. The cut-off yield on this paper was reduced by 5 basis points to 7.53 per cent compared to 7.58pc in the previous auction held on March 10, the State Bank of Pakistan reported.
The cut-off yield on benchmark six-month T-bills remained unchanged at 7.8pc while the government raised Rs388.9bn. The bids for this tenure were Rs468.08bn.
All bids (Rs62.8bn) for 12-month were rejected. The total bids for T-bills for this auction were Rs2,042.929bn while the government accepted Rs1,519.582bn.
The auction trend shows that the banks were over-liquid as they were willing to park maximum liquidity in government papers. At the same time, both the government and the investors were on the same page for the short-term three-month T-bill. The investors were cautious over the interest rate that may change upward in the coming months depending upon the intensity of inflationary pressures.
The government accepted Rs1.150bn for two-year PIBs and rejected all bids for three-year. Total bids for the auction of PIBs were Rs5.95bn. The government also raised Rs2.2bn through PIBs as non-competitive bids.
Published in Dawn, March 25th, 2021