1-year T-bill yield slips to 19.3% in secondary market

June 11, 2024 (MLN): The offer rate of 12-month Market Treasury Bills (MTBs) dropped to 19.3% in the secondary market following yesterday’s monetary policy meeting.

The State Bank of Pakistan (SBP) on Monday lowered its key policy rate by 150 basis points to 20.5%, a bigger margin than expected by market analysts.

The reduction was the first in almost four years and came ahead of the country’s annual budget 2024-25.

The central bank had kept borrowing costs at a record 22% since June 2023.

To recall, in the last T-bill auction held on May 29, 2024, the cut off yields stood at 21% for three-month and six-month papers, and 20.1% for 12-month papers.

The attractive returns of these bonds, coupled with a stable currency, have helped the cash-strapped nation secure a significant $232.5 million in T-Bills from foreign investors during the current fiscal year.

Read: Govt raises Rs500.5bn through T-bills

Similarly, the Karachi Interbank Offered Rate (Kibor) also fell on Tuesday.

The rates dropped across all tenors with the one-week seeing the maximum decline of 120bps to 20.41% and 20.91%.

The benchmark 6-month Karachi Interbank Bid and Offer rates dropped by 56 basis points (bps) to 19.87% and 20.12%.

The 12-month kibor slipped below 20%.

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