T-bills worth Rs404.97bln

SBP sells

KARACHI: The State Bank of Pakistan (SBP) sold market treasury bills (MTBs) worth Rs404.97 billion in an auction held on Wednesday, which is lower than Rs200 billion original target set by the government.

The yields declined on all tenors. The banks offered Rs716.42 billion for the auction. Analysts said decreasing yields on T-bills from the previous auction coupled with higher accepted amount than the target reflect an upward revision in the policy rate by the State Bank in the upcoming monetary policy, which is scheduled to be announced this month.  The SBP cut the policy rate by 25 basis points to 5.75 percent in its previous monetary policy meeting held in May. The yield on  six-month benchmark treasury fell to 5.8408 percent as against 5.9070 percent in the previous auction.It sold Rs227.64 billion worth of six-month paper.

In a latest auction, yield on 12-month paper stood at 5.8586 percent, compared with 5.9123 percent.  It sold Rs107 billion long-term paper.  The cut-off yield for the shortest, three-month treasury bills reduced to 5.8124 percent from 5.8689 percent last.  The SBP sold three-month T-bills worth Rs71 billion.