May 22, 2019 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Wednesday in which it sold treasury bills worth Rs.3,230 Billion for 3 and 6 months.
Auction target was Rs.600 Billion against a maturing amount of Rs.500.663 Billion.
In the first auction since the SBP raised the policy rate by 150 basis points, the Cut off Yields jumped up to 12.7495 percent for 3 months and 12.8010 percent for 6 months.
Earlier, the SBP had received bids worth Rs.3,268.594 Billion for 3 and 6 months while no bids were made for the 12 month T-Bill.
Of the bid amount only Rs.1.5 billion was for 6 months with the remaining amount concentrated in the 3 month T-Bill.
The lack of participation in longer tenors has become a feature in the recent auctions with the market expecting the interest rates to continue rising as the government struggles to contain inflation and a large fiscal deficit.
The SBP accepted Rs.3,188.99 Billion for 3 months and Rs1.50 billion for 6 months which along with the non-competitive bids of Rs. 39.93 Billion made the total accepted amount Rs.3,230.43 Billion.
