The Government of Pakistan successfully raised Rs. 820 billion in its latest auction of Treasury Bills (T-Bills), with cut-off yields decreasing by as much as 140 basis points (bps) across different tenures. According to data provided by the State Bank of Pakistan (SBP), this auction exceeded the government’s initial target of Rs. 400 billion, highlighting strong investor interest with participation totaling Rs. 2,189 billion.
The auction saw significant drops in cut-off yields for T-Bills across the three-month, six-month, and twelve-month tenures. The yield on three-month T-Bills fell by 140 bps, setting the new rate at 13.8998%. Similarly, the cut-off yield on six-month T-Bills decreased by 84 bps to 13.5000%, and the yield on twelve-month T-Bills dropped by 64 bps, now standing at 13.0997%. These declines are indicative of shifting market dynamics and possible adjustments in investor expectations regarding future interest rate trends.
A detailed breakdown reveals that the government secured Rs. 133 billion through competitive bidding for the three-month T-Bills. For the six-month and twelve-month T-Bills, it raised Rs. 106 billion and Rs. 460 billion, respectively. Additionally, an amount of Rs. 121 billion was obtained through non-competitive bids, bringing the total raised in this auction to Rs. 820 billion.
This latest auction aligns with Pakistan’s ongoing strategy to manage liquidity in the banking system, address government financing needs, and regulate inflationary pressures through calibrated adjustments in the T-Bill market.