Karachi, October 4, 2023 – The State Bank of Pakistan (SBP) successfully conducted an auction of Market Treasury Bills (MTBs), selling T-bills worth Rs 557 billion.
The auction saw overwhelming participation from commercial banks, with bidding offers reaching Rs 2.82 trillion.
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Bidding was conducted for three different tenors: 3-month, 6-month, and 12-month securities, with respective bids totaling Rs 2.25 trillion, Rs 120 billion, and Rs 444 billion. The SBP accepted a total of Rs 456 billion in competitive bids and Rs 101 billion in non-competitive bids.
In the competitive bids segment, the SBP accepted Rs 384 billion for 3-month T-bills, Rs 10 billion for 6-month T-bills, and Rs 62 billion in 12-month T-bills. The central bank had set a target of Rs 600 billion for the auction.
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Market experts noted that the aggressive participation from banks was influenced by the record benchmark interest rate of 22 percent.
The cut-off yields in the latest auction were as follows:
• 3-month T-bills: 22.5002 percent
• 6-month T-bills: 22.8500 percent
• 12-month T-bills: 22.84 percent
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Compared to the previous auction, the yields in these securities recorded the following changes:
• 3-month T-bills: -29 basis points
• 6-month T-bills: +5 basis points
• 12-month T-bills: -6 basis points
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This successful auction reflects the continued demand for government debt securities among banks and investors. The SBP’s management of T-bill auctions plays a crucial role in managing the country’s fiscal requirements and liquidity in the financial markets.
