State Bank of Pakistan sold three month Treasury Bills worth Rs 1.06 trillion against a target of Rs. 975 billion set by Central Bank.
The State Bank has set a target of Rs. 975 billion, whereas, banks placed bids worth Rs 1.118 trillion for three months treasury bills while no interest was shown in six month and one year T-bills.
SBP accepted bids worth Rs 1.05 trillion for three months at cut off yields of 5.99 percent.
The Central Bank is expected to announce Monetary Policy next week. The interest shown in smaller tenure hints that over the course of incumbent year, interest rate is bound to rise. Several macroeconomic indicators show that interest rate is expected to go up – inflation has been over 4 percent since last two months and with rising trend witnessed from the increase in petroleum products, inflation is to go up further.
Moreover with the deprecation of Pak Rupee of more than five percent last month, the Monetary Policy Committee has a very strong case for rate hike on the table.