SBP sells treasury bills worth Rs2,212 billion in auction

KARACHI: State Bank of Pakistan (SBP) has raised Rs2,212 billion for budget financing in an auction of market treasury bills.

The SBP on Thursday conducted auction of 3-, 6 and 12-month Market Treasury Bills (MTBs).

The SBP received bids of Rs2,238 billion at face value of Rs2,326 billion in all three maturities.

The central bank accepted bids at Rs2,212 billion at face value of Rs2,297 billion.

The banks are seen more interested in lending in short-term government papers as they offered Rs1,991 billion in three-month MTB at face value of Rs2,054 billion.

The SBP accepted the bids in three-month papers at realized amount of Rs1,978 billion at face value of Rs2,040 billion. The cut-off yield in three-month papers increased to 13.7499 percent as compared with previous auction of Rs12.7422 percent.

The SBP also accepted bids at face value amounting Rs144.21 billion and Rs112.72 billion in 6-month and 12-month treasury bills respectively. The cut-off yield in these two instruments recorded at 13.95 percent and 14.1 percent, respectively.

Banking experts said that the financial institutions were more aggressive in lending their money in government papers considering safe investment and high returns.

The recent policy rate hike also attracted the commercial banks to enhance their exposures in government papers.

The experts said that the reason to raise huge amount from private banks was government decision for not borrowing any more from the central bank.

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