KARACHI: The government rejected all offers for three-month treasury bills, as the market had anticipated, but the auction on Wednesday raised funds that were both close to the objective and far less than the maturity amount.
Experts said the local money market was replete with surplus liquidity after the State Bank of Pakistan provided Rs2.7 trillion in profit to the government, proving a game changer for the banking system, which relies exclusively on risk-free and high-yielding government securities.
The rejection of every bill at the Sept. 18 auction resulted in a significant decline in yields over a protracted period.
“Three-month yields are currently at 15.62 percent, six-month at 14.47 percent, twelve-month at 13.34 percent, three-year at 12.14 percent, five-year at 11.98 percent, and ten-year at 11.89 percent, down 2-3 percent from the previous auction,” stated Topline Securities.
With bids of Rs860 billion, the government raised Rs244 billion in today’s T-bill auction, versus a target of Rs250 billion and a maturity of Rs341 billion. Three-month bids were once more rejected by the administration. For six-month papers, the cut-off yield is 14.39 percent; for twelve-month papers, it is 13.73 percent.
