KARACHI, March 29: The State Bank sold Rs40.515 billion worth of treasury bills of three-, six- and 12-month maturity in an auction on Wednesday. The central bank had set a target of Rs14 billion but sucked in more liquidity from the inter-bank market as it received total bids of Rs45.515 billion.

However, most of the money was raised for one-year without change in the cut-off yield showing the confidence of the investors that the interest rates would remain unchanged during the next year.

The SBP sold Rs36.915 billion of 12-month papers, Rs3.1 billion of three-month bills and Rs500 million of 6-month treasury bills. Maturities flowing into the market on March 30, 2006 would total Rs22.75 billion. Inflows include Rs2.8 billion from maturing T-bills and Rs19.95 billion from OMO maturity.

Analysts said that the net outflow after accounting for the settlement value of the auction would amount to Rs14.713 billion.

This was likely to leave the market short of liquidity. “In the event the SBP does not inject money via OMOs, the market is likely to witness discounting in the near-term,” said Salman Jaffrey, researcher at Jahangir Siddiqui brokerage house.