The government has raised Rs. 659.8 billion through the auction of market treasury bills.
The auction saw investors gravitating toward short-term papers ahead of an expected rate hike. The original target for collection by the government stood at Rs. 700 billion.
According to the State Bank of Pakistan, it sold Rs. 508.6 billion worth of three-month paper, Rs. 150.7 billion worth of the six-month paper, and Rs. 500 billion worth of 12-month paper.
The cut-off yield on the three-month paper rose to 7.5898 percent from 7.2486 percent in the previous auction held on February 24.
The yield on the six-month paper also increased to 7.8000 percent from 7.5489 percent. The yield on 12-month paper stood at 7.7900 percent.
However, the bids of the 12-month paper were rejected by the government in the previous auction.
Annual consumer inflation rose to 8.7 percent in February compared to 5.7 percent in January, as prices of non-perishable foods and fuel continued to increase.
The central bank has kept the interest on hold at seven percent, for three consecutive times, with inflation expectations well anchored.
Interest rates are expected to remain unchanged in incoming monetary policy in March. Inflation remains within State Bank’s forecasted range of 7-9 percent for FY21.
