T-bill auction raises four times more than target

E-Paper | March 16, 2026

KARACHI: The cash-starved government raised almost 300 per cent more than the target through the auction of treasury bills on Wednesday, reflecting a widening gap between revenue collection and its ever-rising expenditures.

The caretaker government has been borrowing heavily to meet the rising spending while the banks are equally eager to invest in the risk-free high-yielding government papers. In the last auction held on Dec 13, the government raised Rs2.15 trillion.

The State Bank of Pakistan (SBP) reported the government raised Rs1.9tr mostly for 12-month tenor on Wednesday.

Investors are cautious about the interest rate which may see a change in coming months. Most of the bids were offered for 12-month T-bills, unlike the previous trend of investing in three-month papers.

Though the SBP has kept its policy rate unchanged at 22pc during FY24 investors anticipate a softening of monetary stance with the deceleration in inflation.

The Monetary Policy Committee of the central bank in its last review predicted an easing of inflation during the second half of the current fiscal year with an improvement in supplies amid falling global prices of essential commodities.

However, many analysts think the elevated 29.2pc CPI inflation in November reduced the chances of any massive deceleration to the SBP target of 23pc. Independent economists estimate the CPI would remain in the range of 23 to 26pc in FY24.

The target was Rs510bn but the bids offered were Rs2.78tr allowing the government to raise Rs1.9tr through auction and Rs88.8bn through non-bids auction.

The highest bids chased the 12-month papers with Rs1,964.3bn and the government picked Rs1,699.6bn at 21.43pc.

Rs28.6bn was raised for the benchmark six-month tenor at 21.39pc against the bids of Rs123.9bn.

The short-term three-month tenor lost attraction compared to the long-term 12-month paper. However, it still received Rs702.2bn bids and the government raised Rs181bn at 21.44pc.

The amount raised by the government was also much higher than the maturing amount of Rs493bn.

Published in Dawn, December 28th, 2023

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Shahid Iqbal is a reporter for Dawn based in Karachi with 38 years of experience covering politics and economics. His career includes seven years with the Japanese newspaper Asahi Shimbun, as well as roles at United Press International (UPI) and AFP.

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