Karachi September 20 2023: On September 20, 2023, the State Bank of Pakistan (SBP) exceeded its target by raising a total of PKR 2,369 billion through the auction of market treasury bills. This achievement was made possible as the Central Bank surprised everyone by maintaining the status quo on interest rates, resulting in significantly lower rates compared to the previous auction.
Majority of the acceptance remained in 3 Month tenure as investors continue to seek higher rates for treasury bills with 6-month and 12-month tenures.
On September 14th, the Monetary Policy Committee (MPC) decided to maintain the policy rate at 22 percent. This decision takes into account the latest inflation outturn reflecting the continuing declining trend in inflation from its peak of 38 percent in May to 27.4 percent in August 2023.
The government received total bids worth PKR 4,578 billion and the highest bids of PKR 3,855 billion for 3 Month T-bills followed by PKR 364 billion for 6 Months and PKR 358 billion for 12 Months.
Cut-off yields decreased by 171 basis points for 3 Month T-Bills, 199 basis points for 6-Months and 217 basis point for 12 Month papers.
The cut-off yield for 3 Months, 6 Months and 12 Months paper settled at 22.7898 percent, 22.8000 and 22.9000 percent, respectively.
Government raise an amount of PKR 2,370 billion in 3 Months followed by PKR 46 billion in 6 Months and PKR 18 billion in 12 Months. However, investors continue to seek higher rates for treasury bills with 6-month and 12-month tenures. Bids for the 6-month bills range from 22.8 percent to 26.25 percent, while bids for the 12-month bills vary between 22.79 percent and 26.5 percent.
The government raised PKR 2,434 billion in the latest auction against a target of PKR 2,250 billion.
