SBP raises Rs817bn through T-bills auction

September 08, 2022 (MLN): The State Bank of Pakistan (SBP) on Wednesday raised Rs817 billion through the auction of three, six, and twelve-month T-bills against the target of Rs1 trillion.

According to the auction result, the cut-off yields for three and twelve-month increased by 21 and 4 basis points to 15.99%, and 15.97%, respectively. However, the cut-off yields for six months remained unchanged at 15.84%.

The market had offered Rs1.29tr, out of which the government accepted bids amounting to Rs817bn, culminating in a realized value of PKR 783bn.

The total amount raised for 3-month T-bills was Rs740.4bn, Rs38.7bn for 6-month, and Rs37.8bn for 12-month T-bills.

The surge in yields is attributed to the market expectation of inflation to remain elevated, going forward. With recent floods, energy tariff hikes, and low base effect, headline inflation is likely to remain north of 20% in the near term, Sana Tawfik, Analyst at Arif Habib Limited said in a report.

From a liquidity standpoint, SBP conducted OMO last week to inject Rs381bn into the market. These frequent injections along with softer international oil prices, to a certain extent, should help provide relief on the liquidity front. However, recent pressure on PKR remains a key concern, she added.

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