KARACHI: The government raised Rs2.2 trillion in treasury bills auction on Wednesday, almost 84 per cent more than the target reflecting the poor liquidity condition.

The total target for the auction was Rs1,200bn.

The State Bank of Pakistan (SBP) reported that the government raised the highest amount of Rs1,979 billion against short-term three-month papers as it received a bill while the bids for the same were Rs2,012bn.

The government raised just Rs5.5bn for six-month and Rs191bn for 12-month T-bills against the bids of Rs223bn and Rs350bn respectively.

The pattern indicates that the investors rely on short-term papers mainly on account of the fear that the interest rate may go up in the coming months.

The central bank left its policy rate unchanged at a record 21pc on Monday for the next two months defusing speculations about further hikes in the interest rate. So the returns on T-bills remained almost steady at 21.99pc for three, six and 12-month papers.

Separately, the government also raised Rs163bn by selling Pakistan Investment Bonds (PIBs). It generated Rs131.8bn for five-year, Rs27.6bn for two-year and Rs4bn for three-year.

Published in Dawn, June 15th, 2023