Govt Raises Rs. 275 Billion From T-bill Auction

The government has raised Rs. 275 billion after auctioning short-term government papers.

According to the data, the State Bank of Pakistan conducted the auction for the sale of 3-month, 6-month and 12-month Market Treasury Bills (MTBs) yesterday and received bids amounting to Rs. 1.113 trillion with a realized amount of Rs. 1.051 trillion.

  • Bids worth Rs. 695.421 billion were received for 3-month T-bills while the government accepted bids amounting to Rs 170.385 billion for 3-month at 13.4694 percent
  • Rs.148.097 billion for 6-month. However Rs. 22.347 billion were borrowed at 13.2890 percent against 6-month MTBs
  • 12-month T-bills fetched bids amounting to Rs. 269.434 billion. Bids amounting to Rs. 82.032 billion were accepted against the sale of 12-month T-bills at 13.1340 percent

The federal government borrowed Rs. 274.764 billion (with a realized amount Rs. 258.805 billion) through the auction for MTBs held on Wednesday against a target of Rs. 400 billion.

According to the data, it was seen that investors were more interested in the short term three-month T-bills rather than the medium to long term ones as they are seeing possible cuts in the interest rate.

Osama Rizvi, an economic and geopolitical analyst, says:

The question here involves a trade-off. If the government keeps the policy rate high it will indeed bring in more “hot money”. But it comes with a cost. Our Large Scale Manufacturing sector has experienced a decline of almost 6 percent. Also, hot money isn’t sustainable, as the name indicates. We need investment in PIBS or FDI . The government might have opted going for a bond as investors are buying our reform story (indicated by the influx of hot money). I believe we should start bringing the interest rates down. Sequence and pace of a policy is very important and it is the right time to change both – as we now have some CAS and primary surplus too.

The PSL 2020 is almost here! Want to know everything about it? Visit the pages below (Live stream will be available when the matches begin).
PSL Live Streaming PSL Points Table | 2020 PSL Teams PSL 2020 Schedule PSL 2020 Highlights PSL 2020 Statistics