January 04, 2023 (MLN): The government on Tuesday raised Rs655 billion from a special auction of treasury bills against a target of Rs300bn, result data published by the State Bank of Pakistan (SBP) showed.
The SBP received bids worth Rs845bn, and all of the amounts were concentrated in a three-month tenure at a cut-off yield of 16.99%, marking no change from the previous auction.
Traditionally, the auctions of T-bills are conducted after every fifteen days and the schedule along with targeted and maturity amounts have been revealed through pre-announced calendars.
However, this was an unplanned auction in which the government has taken advantage of excess liquidity, Fahad Rauf, the head of equity research at Ismail Iqbal Securities told Mettis Global.
Can government schedule such unplanned auctions?
Yes, the government can hold as many auctions complying with the legal framework but this type of auction demonstrates a desperation to raise money for debt settlement and other expenditures.
