KARACHI: The cut-off yields on treasury bill (T-bills) were slashed by up to 14 basis points (bps) despite a hike in the interest rate.

The government raised Rs730 billion from the auction, the State Bank of Pakistan said on Wednesday.

Bids for three-months T-bills were the highest. The government raised the highest amount for the same tenor.

The bids offered were Rs1,166bn and the government raised Rs535bn for the three-months papers. The cut-off yield on this paper was reduced by 14 basis points (bps) to 10.45 per cent.

The bids pattern showed the presence of excess liquidity in the banks but the government stuck to its target of Rs650bn set for the auction.

While the total bids were Rs1,942bn, the government raised Rs80bn more than the targeted amount.

The cut-off yield for six-month T-bills was also reduced by 8bps to 11.37pc while the government raised Rs107bn against the bids of Rs647bn.

The amount raised for 12-month T-bills was Rs20bn against the bids of Rs128.5bn while the cut-off yield was reduced by 2bps to 11.49pc.

The government also raised Rs51.75bn through the auction of Pakistan Investment Bonds. The amount was raised for three-year PIBs.

The government raised most of the amount through the T-bills to meet the maturing amount due for this date.

The maturing amount is Rs682bn.

Published in Dawn, January 13th, 2022