KARACHI: The margins on short-term government securities rose up to 130 basis points (bps) in the auction held Wednesday despite no change in key policy rate.
The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) kept the policy rate unchanged in its meeting held Tuesday, however, the committee also hinted some changes in near future in the wake of Russia- Ukraine conflict.
This indication directly reflected in the first auction for Market Treasury Bills (MTBs), held after the announcement of the monetary policy.
The State Bank on Wednesday for the sale of 3-month, 6-month and 12-month MTBs received bids amounting to Rs 1.009 trillion with a realized value of Rs 962 billion.
Most of the bids were received for 3-month T-Bills as banks are expecting some increase in key policy rate in coming months.
The received bids include Rs 561 billion for 3-month, Rs 275.8 billion for 6-month and Rs 173 billion for 12-month.
The federal government accepted bids amounting to Rs 910 billion (Rs 867.8 billion realized value) against the target of Rs 1 trillion set for this auction.
The cut-off yield on all T-bills went up ranging between 96 bps to 130 bps in the auction held on March 9, 2022.
The cut-off yield of 3-month T-bills increased by 96 bps to set at 11.4508 percent up from 10.4899 percent in the previous auction. The borrowed amount through 3-month bill was Rs 511 billion.
For the 6-month, bids amounting to Rs 256 billion were accepted at a cut-off yield of 12.1000, up by 121 bps.
Similarly, the cut-off yield of 12-month T-bills surged 130 bps to set at 12.2957 percent against Rs 143 billion borrowing.
In addition, the federal government also borrowed some Rs 112.25 billion through auction for Pakistan Investment Bonds Floating Rate out of received bids amounting Rs 129.5 billion on Wednesday. This includes Rs 30 billion of 2-year bonds and Rs 80.25 billion of 3-year PIBs.
Copyright Business Recorder, 2022
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