KARACHI: State Bank of Pakistan (SBP) has sold treasury bills amounting Rs560 billion at cut-off yield at 11.2491 percent, much above the key policy rate of 10.75 percent.
The SBP on Wednesday offered bids to auction Market Treasury Bills (MTB) of three-, six- and 12-month maturities.
The SBP received bids of Rs560 billion at face value of Rs574.186 billion in three-month MTBs. However, the SBP did not receive bids in other papers.
The central bank accepted all the bids in three-month maturities at cut-off yield of 11.2491 percent.
The high cut-off yield indicates further rise in key policy rate to be announced this month.
In its monetary policy announcement on March 29, 2019 the SBP increased key policy rate by 50 basis points to 10.75 percent.
Banking experts said that the financial institutions were only interested in short term maturities as those were anticipating further hike in policy rate in upcoming monetary policy announcement.
The SBP has set a target of Rs1,200 billion for this auction in order to help the government in meeting budgetary financing.
However, the central bank could only raise Rs560 billion.