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Islamabad: The Government of Pakistan successfully raised Rs. 452 billion through its latest Treasury Bills (T-Bills) auction, slightly exceeding its target of Rs. 450 billion despite the State Bank of Pakistan’s (SBP) recent 100-basis-point policy rate cut and declining inflation figures.
According to official data released by the SBP, the auction gathered strong market participation through Rs. 918 billion worth of bids. T-Bill cut-off yields exhibited an upward trajectory because the market adapted through monetary policy changes from the central bank.
Auction Breakdown
- 3-Month T-Bills: The government successfully raised Rs. 153.2 billion while yields increased by 21 basis points until reaching 11.7998%.
- 6-Month T-Bills: Rs. 28 billion were secured, with yields increasing by 10 bps to 11.5048%.
- 12-Month T-Bills: The highest amount of Rs. 212 billion was raised, with yields climbing 20 bps to 11.5898%.
The government collected Rs. 452 billion after securing Rs. 58.2 billion from non-competitive bidding platforms in addition to competitive bidding results.
Market experts explain that interest rates increased because of directed adjustments after the SBP introduced a lower-than-expected interest rate cut. Analysts predicted a robust rate cut of over 150 bps yet the central bank decided to make a more restrained 100-bps reduction which kept the policy rate at 12 percent.
The central bank’s slow-down approach stems from declining inflation trends. The January inflation statistics of Pakistan reached the lowest point in over nine years at 2.4 percent while showing a decrease from December’s 4.1 percent.
Recent yield levels exceed initial expectations because the market continues being cautious while adapting its projections to the monetary policy decisions made by the SBP. As inflation continues to trend downward, future auctions may see further shifts in investor sentiment and yield adjustments.
