KARACHI: The government raised Rs882 billion from the auction of market Treasury bills on Wednesday, while yields on the short-term papers remained unchanged and decreased slightly for the long-term tenors.
The amount raised exceeded the pre-auction target of Rs400 billion. Total participation in the auction amounted to Rs2.287 trillion.The cut-off yield on the one-month T-bill ended at 11.3504 per cent, unchanged from the previous auction held on July 22. The three-month paper yield also stayed flat at 11.5149 percent. The six-month T-bill fell 10 basis points (bps) to 11.7000 per cent. The yield on the 12-month note declined 4 bps to 11.949 per cent.
Analysts said the latest T-bill auction results signal no change in interest rates at the upcoming policy review by the State Bank of Pakistan (SBP). Though inflation eased in July, it is likely to return to double digits in the coming months. That reduces the case for any further rate cut in the near term.
Inflation, measured by the consumer price index, slowed to 9.2 per cent in July from 11.07 per cent in the previous month.Last week, the SBP held its benchmark interest rate at 11.5 per cent, citing inflation and external account risks amid renewed geopolitical tensions.
The SBP expects inflation to remain higher than the medium-term target rate of 5-7 per cent for the next few months; however, inflation will subsequently ease gradually and stabilise near the upper bound of the 5-7 per cent target range by June. But this outlook is subject to multiple risks, including volatility in global energy prices, unanticipated adjustments in administered energy prices, unfavourable climate conditions and potential fiscal slippages.
