KARACHI: The government raised Rs688 billion (realised value) from the auction of market treasury bills on Wednesday, with yields increasing across all tenors.
The one-month T-bill cut-off yield rose 86 basis points (bps) to 12.23 percent. The yield on the three-month paper also increased 41bps to 12.4904 per cent. The six-month T-bill yield was up 15bps to 12.4999 percent. Similarly, the 12-month T-bill yield increased 9bps to 12.59 per cent.
The government raised Rs702 billion (face value) from the T-bill auction against the target of Rs450 billion, with a maturity of Rs479 billion. The participation in the auction was Rs1.73 trillion.
Analysts said that the ongoing increase in cut-off yields reflects growing market expectations for further monetary tightening. The State Bank of Pakistan raised its benchmark interest rate by 100bps to 11.5 percent in April, citing concerns about inflation stemming from oil price volatility and supply disruption amid the Middle East conflict.
With inflation expectations for May projected at 12-13 per cent, investors are becoming increasingly cautious, anticipating that the SBP may consider another rate hike at the next policy review due on June 15.
The consumer price index inflation increased to 10.9 per cent year-on-year (YoY) in April, compared to 7.3 per cent in the previous month.
In another auction on the same day, the government rejected bids for the 10-year floating-rate Pakistan Investment Bonds.
