Karachi March 8 2023: On March 8 2023, SBP raised PKR 1,569 billion through the auction of market treasury bills at all time high rates and up to 99 basis points above the policy rate of 20 percent, according to State Bank of Pakistan.
The government received total bids worth PKR 2,447 billion and the highest bids of PKR 1,919 billion for 3 Month T-bills followed by PKR 289 billion for 12 Months and PKR 238 billion for 6 Months.
The cut-off yield for 3 Months, 6 Months, and 12 Months paper settled at 20.99 percent, 20.8498 percent, and 20.9899 percent, respectively. Cut-off yields increased by 105, 95 and 120 basis points for 3 Month, 6 Month, and 12 Month T-Bills, respectively.
On 2nd March 2023, the Monetary Policy Committee (MPC) decided to increase the policy rate by 300 basis points to 20 percent as the committee expects inflation to rise further in the next few months as the impact of these adjustments unfolds before it begins to fall, albeit at a gradual pace. The average inflation this year is now expected in the range of 27 – 29 percent against the November 2022 projection of 21 – 23 percent. In this context, the MPC emphasized that anchoring inflation expectations is critical and warrants a strong policy response.
The government raised amount of PKR 1,564 billion in 3 Month T-bills followed by PKR 3.44 billion in 12 Months and PKR 2.52 billion in 6 Months papers.
Despite offering unprecedented high rates the government failed to raise the targeted amount, raising PKR 1,569 billion in the latest auction against a target of PKR 1,800 billion.
