The cut-off yields on Treasury Bills (T-Bills) were down by 24-26 basis points (bps) in the auction of the paper held on Wednesday.
According to the data released by the State Bank of Pakistan (SBP), the government raised Rs. 877 billion against an initial target of Rs. 650 billion in the auction as a result of the central bank’s unchanged interest rate.
Investors purchased government bonds at a lower yield than the previous auction due to lower-than-expected inflation figures and forecasts of an unchanged policy rate.
Official data indicates that the cut-off yields for the three-month T-Bills slid by 26 bps to 15.74 percent from 15.99 percent observed on 21 September. Similarly, proceeds for the six-month paper dropped by 25 bps to 15.75percent, while yields on the 12-month paper went down by 24 bps to 15.75 percent from 15.99 percent recorded in the previous auction.
The government raised Rs. 508 billion against a targeted amount of Rs. 200 billion for the three-month paper in the competitive auction, and it raised Rs. 52 billion against a target of Rs. 250 billion for the six-month paper.
Moreover, it raised Rs. 212 billion against a target of Rs. 200 billion through the 12-month bond during the auction.
The entire amount raised for the three-month paper was Rs. 558 billion, Rs. 77 billion for the six-month paper, and Rs. 241 billion for the 12-month paper.
A further breakdown of the official numbers indicates that the government raised Rs. 772 billion from the competitive auction and Rs. 105 billion through non-competitive bids, which made total proceeds of Rs. 877 billion.
