KARACHI: The government raised more than double the target set for the auction of treasury bills held on Wednesday.

The cut-off yields on three-month and 12-month tenors were reduced by 27 and three basis points, respectively, while the rate on benchmark six-month T-bills remained unchanged. The yields on three, six and 12 months were 21.4pc, 20.4pc and 20.3pc, respectively.

The auction once again reflected the banks’ growing appetite for domestic bonds which helped them to earn 70 to 90pc more profits in 2023.

The total bids for the T-bills were Rs1,354.4bn while the government raised Rs526.9bn against the target of Rs225bn.

The government has accumulated more than Rs4tr from banks during FY24. The banks in Pakistan have been earning huge profits through lending to the government while the private sector is either ignored or the costly money barred the private sector from entering the money market.

The higher borrowing by the government has increased the debt servicing out of control while the lowest borrowing by the private sector has marred the economic growth.

The IMF has projected 2pc economic growth in FY24 but many believe that it may fall further if the political uncertainty remains haunting the economy.

Published in Dawn, March 7th, 2024