Karachi May 14 2025: In today’s treasury bill auction, the government raised PKR 638.7 billion, exceeding the target of PKR 550 billion, achieving 17 percent more than the intended amount due to decline in cut-off yields of over 90 basis points.
The yields drops in relation to the recent policy rate cut to 11 percent and marks the lowest yield levels since February 24, 2022, as reported by the State Bank of Pakistan.
In May 6, 2025 meeting, the Monetary Policy Committee (MPC) cut the policy rate by 100 bps to 11 percent. The Committee noted that inflation declined sharply during March and April, mainly due to a reduction in administered electricity prices and continued downtrend in food inflation. Core inflation also declined in April, primarily reflecting favorable base-effect amidst moderate demand conditions.
Overall, the MPC assessed that the inflation outlook has improved further relative to the previous assessment. At the same time, the Committee viewed that the heightened global uncertainty surrounding trade tariffs and geopolitical developments could pose challenges for the economy. In this backdrop, the MPC emphasized the importance of maintaining a measured monetary policy stance.
The largest amount was raised through 1-month treasury bills, totaling PKR 330.6 billion, with cut-off yields for this paper declining by 90 basis points to 11.2496 percent.
For 3-month treasury bills, the government secured PKR 100.5 billion, with yields dropping by 77 basis points to 11.2399 percent.
For 6-month treasury bills, the government accepted PKR 58.7 billion, with yields dropping by 72 basis points to 11.279 percent.
Additionally, PKR 148.9 billion was raised in 12-month treasury bills, where yields fell by 66 basis points to 11.349 percent.
