KARACHI: The government rejected almost all competitive bids in the auction of treasury bills held on Wednesday while it accepted only Rs0.5 billion for three-month tenor.

However, the government raised Rs55.258bn through non-competitive bids for three-month making the total as Rs55.8bn. The cut-off yield remained unchanged at 8.5 per cent.

The early monetary policy call by the State Bank has already alerted the investors who believe an increase in the interest rate is in the offing.

Bankers said the investors were asking higher rates but the government rejected almost all except Rs0.5bn for three-month against the target of Rs200bn.

The total bids for the auction were Rs541.4bn while the government’s target for the auction was Rs600bn.

The highest bids of Rs282.9bn were for three-month papers.

Analysts said the bids price were too high for the government to raise the money. If the interest rate is increased in the monetary policy to be announced on Nov 19, the T-bills rates would also be raised.

The government also raised Rs29.44bn through competitive and non-competitive bids of Pakistan Investment Bonds.

Published in Dawn, November 18th, 2021