SBP sells Rs64bn T-bills against Rs480bn target, yields fall further

February 06, 2024 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Tuesday in which it sold Market Treasury Bills (MTBs) worth Rs63.84 billion for 3,6 and 12 months against a target of Rs480bn.

Cut off yields for 3, 6, and 12 months were 20.4399%, 20.3951%, and 20.0800%, depicting a fall of 6bps and 15bps in 3 month and 12 month. While the yield for 6 month paper remained stable.

To note, the central bank last week kept borrowing costs at a record high of 22% for a fifth consecutive meeting to curb inflation.

Total amount offered was Rs1.153tr out of which the SBP accepted Rs64bn.

The SBP received bids worth Rs482.66bn for 3 months, Rs80.29bn for 6 months, and Rs589.88bn for 12 months out of which it accepted Rs17.53bn for 3 months, Rs1.1 million for 6 months, and Rs5bn for 12 months.

In addition, the SBP picked up Rs41.32bn from the non-competitive auction, making the total amount accepted Rs64bn.

The bid-to-cover ratio, which shows the amount of bids received versus the amount sold, rose to 18.06 as against 6.24 in the previous auction. In other words, the SBP only accepted about 5.54% of the total bids it received.

To note, the central bank in the last auction held on January 10, 2024 sold MTBs worth Rs185bn against a target of Rs225bn.

Cut-off yields for 3, 6, and 12 months were 20.4997%, 20.4%, and 20.2298%.

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