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KARACHI: The federal government raised Rs768 billion through the auction of Treasury bills on Wednesday, reflecting no change in the borrowing pattern from the previous fiscal year.
The banks came out with huge liquidity, over Rs2 trillion, to invest in government papers, the easiest way to earn risk-free profits.
The State Bank of Pakistan (SBP) reported on Wednesday that while the banks were eager to park the maximum of their liquidity, a provincial government also invested Rs300bn in public securities. The government has already opened doors for the general public to invest in government papers by opening an account for InvestPak.
The government believes that general public investment would reduce the bulk of banks’ investment that would otherwise go to the private sector, thereby boosting economic activity.
The highest bids were received for one-month tenor, which totalled Rs990.4bn (almost Rs1 trillion). This suggests that the market is not ready to take long-term risk, or there is a chance of a change in the interest rate in the next monetary policy review in the last week of this month.
However, Rs540bn bids were offered for three-month and Rs229.2bn for the benchmark 6-month T-bills. The banks offered Rs338bn for 12-month.
The government picked up more from the non-competitive bids than bids offered by the banks. The government raised Rs376bn through competitive bids while it raised Rs392.3bn through non-competitive bids.
The SBP said that of the accepted NCBs, provincial government bids were Rs300bn. It was not mentioned which provincial government.
The government raised Rs333.8bn for three-month; Rs210bn for six-month; Rs179bn for 12-month and Rs44.6bn for one-month papers. The total amount raised through the auction reached Rs768.398bn.
The cut-off yields were 11.99pc for 12-month; 11.79pc for 6-month; 11.51pc for 3-month and 11.35pc for one-month T-bills.
The pattern shows that the government is ready to borrow more but not ready to enhance the interest rate.
Published in Dawn, July 23rd, 2026
