SBP raises Rs506bn through T-bills auction, yields jump by up to 100 bps

July 13, 2022 (MLN): The State Bank of Pakistan (SBP) has raised Rs506 billion through the auction of three, six, and twelve-month T-bills against the target of Rs500bn.

In the auction conducted on Wednesday, the cut-off yields for three, six, and twelve-month have increased by 52, 100, and 99 basis points, respectively.

The market had offered Rs1.57tr, out of which the government accepted bids amounting to Rs506bn, culminating in a realized value of Rs479bn.

The total amount raised for 3-month T-bills was Rs386.98bn, Rs42.23bn for 6-month, and Rs76.91bn for 12-month T-bills.

Following the commencement of the first monetary policy of FY23, wherein the SBP raised the policy rate by 125bps to 15%, the money market yields too witnessed an increase of 50-100bps. The increase in yields was recorded across all the tenors, a note by AHL noted.  

With the data available, since June 1998, 3M and 12M yields are the highest ever while 6M yields are the highest. The rise in treasury yields also hints toward investors weighing in inflation and economic growth, it added.

The investors continue to take note of rising inflation around the world as well as in Pakistan along with a strong possibility of a slowdown in economic growth.

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