Govt raises Rs481bn through T-bills, yields fall 30-56bps

July 24, 2024 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Wednesday in which it sold Market Treasury Bills (MTBs) worth Rs481.17 billion.

The target was to raise Rs150bn while the maturity amount was Rs123bn.

Cut off yields stood at 19.4899% (-56bps) for 3 months, 19.2891% (-50bps) for 6 months, and 18.2389% (-30bps) for 12 months.

To note, the Monetary Policy Committee (MPC) of the SBP will meet on Monday, July 29 to decide about the monetary policy.

In the last MPC meeting held on June 10, the committee slashed interest rates by 150 basis points (BPS) to 20.5% after holding it at a record 22% for a year.

The reduction was the first in almost four years after what has been the most aggressive fight against soaring inflation.

Total amount offered in today's auction was a staggering Rs1.79 trillion, with the SBP receiving bids worth Rs259.81bn for 3 months, Rs1.03tr for 6 months, and Rs507.24bn for 12 months.

Out of this, SBP accepted Rs72.74bn for 3 months, Rs207.09bn for 6 months, and Rs142.36bn for 12 months.

In addition, the central bank picked up Rs58.97bn from the non-competitive auction, making the total amount accepted Rs481.17bn.

The bid-to-cover ratio, which shows the amount of bids received versus the amount sold, rose to 3.73 as against 2.78 in the previous auction. In other words, the SBP accepted about 26.8% of the total bids it received.

To note, the central bank in the last auction held on July 10, 2024 sold MTBs worth Rs442bn against a target of Rs150bn.

Cut-off yields for 3, 6, and 12 months were 20.0494%, 19.7849%, and 18.54%.

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