Govt raises Rs835bn without a cut in T-bills rates on wednesday

Govt raises Rs835bn without a cut in T-bills rates on wednesday 

Govt raises Rs835bn without a cut in T-bills rates

KARACHI: Without changing the cut-off yields on treasury bills (T-bills), the government raised Rs835 billion, exceeding the auction target, on Wednesday.

Financial market experts said the auction result was up to expectations since the market has already incorporated the expected cut in the interest rate.

 The Pakistan government recently raised Rs835 billion through a treasury bill (T-bill) auction, exceeding the target of Rs700 billion. Despite the strong demand, cut-off yields remained almost unchanged. 

The three-month T-bill yield  fell  by one basis point to 17.48%, while the yields of six-month and 12-month T-bills remained at 17.74% and 16.9989%, respectively.

The auction witnessed strong demand for long-term notes, especially 12-month notes, due to market expectations that the State Bank of Pakistan (SBP) may cut interest rates at its next monetary policy meeting, which may be affected by a sustained decline in inflation.

 Analysts expect a rate cut of 100-150 basis points due to favorable inflation trends, which saw inflation reach single digits at 9.6% in August,  the first time in almost three years