Karachi: The State Bank of Pakistan (SBP) on Wednesday (July 13) fetched PKR 506 billion from the auction of short to medium-term Pakistan Market Treasury Bills (MTBs) through primary dealers, news sources reported. The central bank received bids of PKR 1.54 trillion, with most bids on 3-month treasury bills.
The auction is said to be the first since interest rates were raised by 125 basis points to 15% on July 7. The majority of bids submitted were for three-month bills, in anticipation of another interest rate hike by the government to combat inflation in the coming months. Furthermore, the government received bids for 3-month MTBs worth PKR 1.26 trillion, 6-month MTBs worth PKR 247 billion, and 12-month MTBs worth PKR 200 billion, with cut-off yields of 15.75%, 15.80%, and 15.94%, respectively.
The central bank, however, only accepted PKR 356.326 billion on three-month MTBs, PKR 38.463 billion on six-month MTBs, and PKR 71.015 billion on twelve-month MTBS. Furthermore, offers totalling PKR 37.317 billion were approved as non-competitive bids. Furthermore, the government also auctioned long-term Pakistan Investment Bonds (PIBs), which received PKR 311.84 billion for two and three years term bonds. Of the total bids received on PIB, SBP accepted only bids of PKR 173.340 billion and PKR 1.25 billion, respectively.
It is important to note that SBP recently auctioned short-term bonds and received total bids of 1.7 trillion, which the central bank, to the surprise of many, rejected and placed for reauction. The short-term treasury bonds are usually auctioned to collect funds for government development work with a higher than normal margin that is usually purchased by banks and DFIs.
Nauman Ahmad is an imaginative Pisces whose love for literature and nature is unparalleled. When he's not reading or hiking, he's sleeping and eating, which gives him plenty of energy for his next adventure.
