September 18, 2024 (MLN): The State Bank of Pakistan (SBP) conducted an auction for Market Treasury Bills (MTBs) on Wednesday but unexpectedly rejected all the bids.
The target was to raise Rs475bn while the maturity amount was Rs113bn.
Total amount offered was Rs1.43 trillion, with the SBP receiving bids worth Rs221.54bn for 3 months, Rs278.62bn for 6 months, and Rs925.13bn for 12 months.
The range of rates at which bids were offered were 16.90%-17.75% for 3 month papers, 16.60%-18.00% for six month papers, and 15.98%-17.50% for the 12 month T-bills.
According to the bid pattern, if SBP had decided to raise the target amount, yields would have fallen by 29-101bps for 3-12 month tenors.
Last week, SBP lowered its key policy rate by 200 basis points to 17.5%. The reduction was the third in a row, bringing the total decrease since June 2024 to 450bps as a slowdown in inflation give policymakers enough room to continue monetary easing in a bid to spur growth.
To note, the central bank in the last auction held on September 04, 2024 sold MTBs worth Rs835bn against a target of Rs700bn.
Cut-off yields for 3, 6, and 12 months were 17.4799%, 17.7399%, and 16.9989%.
