KARACHI: During the Treasury Bill auction that took place on Wednesday, the government raised more than twice as much as anticipated.
The rate on benchmark six-month T-bills stayed the same, but the cut-off yields on three- and 12-month tenors dropped by 27 and three basis points, respectively. Three-, six-, and twelve-month yields were 21.4 percent, 20.4 percent, and 20.3 percent, respectively.
The auction once more demonstrated the banks’ increasing interest in domestic bonds, which contributed to their 70–90% increase in earnings in 2023.
The government raised Rs526.9bn against the objective of Rs225bn, while the total amount bids for the T-bills were Rs1,354.4bn.
During FY24, the government had amassed more than Rs4 trillion from banks. While the private sector is either ignored or prevented from entering the money market by the expensive money, Pakistani banks have been making enormous profits by lending to the government.
The government’s increasing borrowing has led to unmanageable debt servicing, while the private sector’s reduced borrowing has stunted economic expansion.
The IMF has predicted that the economy will grow by 2% in FY24, but many people think that if the political unrest continues to plague the economy, it could contract much more.
