KARACHI: The government raised Rs1.339 trillion (realised value) from the auction of market treasury bills on Wednesday, with yields increasing after the State Bank of Pakistan hiked interest rates to tackle the inflationary impact of the Middle East conflict.
The raised amount was higher than the target of Rs650 billion.The cut-off yield on the one-month T-bill was 78 basis points higher at 11.4785 percent, while the yield on the three-month paper increased 40 basis points to 11.8398 percent. The six-month T-bill yield rose 83 basis points to 11.9801 percent. Similarly, the 12-month T-bill yield increased 21 basis points to 12.0999 percent.
The government raised Rs1.374 trillion in terms of face value through the T-bill auction. The auction witnessed the participation of Rs4.25 trillion.The SBP lifted its key interest rate by 100 basis points to 11.5 percent on Monday, its first rate hike in almost three years.
In its post-meeting statement, the SBP said that the ongoing conflict in the Middle East has intensified risks to the macroeconomic outlook. It pointed to rising global energy prices and increased freight charges and insurance premiums, as well as supply chain disruptions, all of which have contributed to the current uncertainty.
“While the incoming data has been broadly in line with the MPC’s [Monetary Policy Committee] expectations so far, the impact of these global developments will be visible in key economic indicators going forward,” the SBP said.
“Going forward, the MPC assessed that the current supply shock may push inflation to double digits in the coming months before it starts to ease subsequently,” it added. “However, inflation is expected to stay above the upper bound of the target range of 5-7 per cent for most of FY27.”The consumer price index inflation increased to 7.3 per cent year-on-year (YoY) in March, compared to 7.0 per cent in February.
