Govt raises Rs1.2tr through T-bills, yields fall by up to 115bps

June 12, 2024 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Wednesday in which it sold Market Treasury Bills (MTBs) worth Rs1.21 trillion.

The target was to raise Rs780bn while the maturity amount was Rs810bn.

Cut off yields stood at 20.1498% (-85bps) for 3 months, 19.9693% (-103bps) for 6 months, and 18.9489% (-115bps) for 12 months.

In a major development, the State Bank of Pakistan (SBP) lowered its key policy rate by 150 basis points to 20.5% on Monday, 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.

In today's auction, total amount offered was Rs2.19tr, with the SBP receiving bids worth Rs586.56bn for 3 months, Rs683.65bn for 6 months, and Rs917.7bn for 12 months.

Out of this, SBP accepted Rs289.74bn for 3 months, Rs489.27bn for 6 months, and Rs315bn for 12 months.

In addition, the central bank picked up Rs114.39bn from the non-competitive auction, making the total amount accepted Rs1.21tr.

The bid-to-cover ratio, which shows the amount of bids received versus the amount sold, dropped to 1.81 as against 2.37 in the previous auction. In other words, the SBP accepted about 55.2% of the total bids it received.

To note, the central bank in the last auction held on May 29, 2024 sold MTBs worth Rs500.5bn against a target of Rs450bn.

Cut-off yields for 3, 6, and 12 months were 21.0001%, 21%, and 20.1001%.

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