A very thin participation was witnessed in the auction for Government of Pakistan Market Treasury Bills (MTBs), held Wednesday. The State Bank conducted the auction for the sale of 3-month, 6-month & 12-month short-term government papers on February 28, 2018. In response to the tender, overall some Rs 323.746 billion with a realized amount of Rs 318.738 billion bids were received for the sale of 3- and 6-month T-bills. However, no bid was received for 12-month papers.
The bids submitted for this auction were much lower than the target of Rs 650 billion set by the federal government. Out of the receive bids, the federal government borrowed an amount of Rs 274.312 billion through the sale of 3-month MTBs. All bids of 6-month tenors were rejected by the federal government. The cut-off yield of 3-month Treasury Bills rose slightly by 4 basis points to 6.2591 percent up from 6.2144 percent.
Bankers said with expectations of a tight monetary policy in coming months, financial institutions are avoiding parking funds for six-month or one-year varieties. They said a thin participation was as per the expectations as the market was already reluctant to park the amount at lower interest rates.
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