KARACHI: The State Bank of Pakistan (SBP) successfully raised Rs103.9 billion through the sale of Market Treasury Bills (MTBs) in an auction held on Wednesday.
During the auction, the SBP received bids totaling Rs104.426 billion against the face value of Rs106.9 billion for three-month MTBs. For the six-month period, bids amounting to Rs380 million were received against the face value of Rs400 million. However, there were no bids received for the 12-month papers.
The SBP accepted bids for the sale of three-month bills, with the accepted amount totaling Rs101.496 billion against the face value of Rs103.9 billion. On the other hand, bids for six-month maturities were rejected by the central bank.
The cut-off yield for the three-month papers was set at 10.3 percent, which is above the key policy rate at 10 percent. This successful auction reflects the ongoing efforts by the SBP to manage liquidity and meet budgetary requirements.
The upcoming announcement of the monetary policy by the State Bank of Pakistan on Thursday has led market experts to anticipate that the central bank is likely to maintain the status quo. While the cut-off yield indicates the prevailing interest rates in the market, the monetary policy decision will provide insights into the central bank’s broader economic outlook and its approach to managing inflation, interest rates, and economic stability.
The auction’s success underscores the confidence of investors in the government securities market, and the funds raised will contribute to the country’s budgetary needs. As Pakistan navigates economic challenges, the effective management of monetary policy and the successful execution of financial instruments like MTBs play a crucial role in sustaining economic stability and fiscal resilience.
