KARACHI: After frequent increase in the treasury bills rates, the government has slightly reduced the cut-off yields giving message that interest rate may not get appreciation.

The auction held on Wednesday shows that the 3-month T-bills noted a decline of 29 basis points in cut-off yields. Now the rate declined to 14.50 per cent.

Similarly, the 6-month benchmark T-bills cut-off yields were slashed by 29 basis points to 14.70pc. The previous 14.99pc rate was criticised by analysts while the other stakeholder said the interest rate has already gone up in the banks. The policy rate is currently at 12.25pc, the T-bill rate was about 15pc which pushed the Karachi Inter-Bank Offered Rate (Kibor) to around 15pc.

However, the market experts still believe that the policy interest rate has large space for increase in the coming days or weeks.

The 12-month T-bills noted a decline of just 5 basis points to 14.75pc during the current auction. The government raised Rs351bn against the target of Rs500bn while the bids for auction were Rs1,008bn.

PIBs: The government raised Rs14.513bn through auction of Pakistan Investment Bonds (PIBs) on Wednesday. The government raised Rs12.5bn for 2 years, Rs2bn for 3 years while it raised only Rs13 million as non-competitive bids.

Published in Dawn, May 19th, 2022