Central Bank fetches Rs 527 billion through T-Bills auction
The State Bank of Pakistan (SBP) achieved a significant feat on Wednesday by effectively auctioning market treasury bills valued at Rs 527 billion, surpassing the initial target of Rs 225 billion.
The auction attracted considerable interest from commercial
banks, with total bids reaching an impressive Rs 1.35 trillion, driven by the
allure of attractive interest rates.
Pakistan
raises a massive Rs 2.14 trillion through Treasury Bills auction
In a noteworthy display of enthusiasm, commercial banks
actively participated in the auction, submitting bids of Rs 652 billion, Rs 72
billion, and Rs 630 billion for 3-month, 6-month, and 12-month maturities,
respectively. The robust participation from banks reflects the prevailing
market sentiment and the appeal of treasury bills amidst the current economic
environment.
Despite the overwhelming bids, the central bank accepted
both competitive and non-competitive bids, totaling Rs 527 billion. The
accepted bids comprised Rs 208 billion for 3-month maturity, Rs 10 billion for
6-month maturity, and Rs 309 billion for 12-month maturity. This acceptance
underscores the strong demand for government securities in the financial
market.
One-year
Ijarah Sukuk fetches Rs. 479 billion, exceeding the target by Rs. 30 billion
The cut-off yields for the auction were established at
21.4002 percent, 20.3949 percent, and 20.2998 percent for 3-month, 6-month, and
12-month treasury bills, respectively. Analysts at Topline Research observed a
decrease in the cut-off yield, particularly by 30 basis points for 3-month
treasury bills and 3 basis points for 12-month treasury bills. This decline
indicates a positive trend, potentially signaling enhanced investor confidence
in the stability and appeal of government securities.
The auction of market treasury bills serves as a vital
mechanism for the SBP to raise funds for the government, assisting in financing
the budget deficit. The strong response from the banking sector reflects
confidence in the government’s financial instruments, which play a crucial role
in maintaining fiscal stability and meeting the financial obligations of the
nation.
Government's
plan to secure Rs11.09 trillion from banks
Analysts anticipate that this successful auction will
significantly contribute to the government’s fiscal objectives and provide the
necessary funds to address budgetary requirements. Moreover, the heightened
engagement from banks underscores confidence in the economic outlook and the
efficacy of treasury bills as a viable investment avenue.
As the SBP continues to implement strategic measures to
manage the country’s fiscal affairs, the successful auction serves as a
positive indicator for both the financial markets and the broader economy. The
sustained interest from banks highlights the significance of these financial
instruments in the overall economic landscape, positioning treasury bills as a
pivotal element of the government’s fiscal strategy.
Source: pkrevenue.com