Auction for MTBs: Govt raises only Rs64bn against Rs480bn target

KARACHI: The federal government on Tuesday raised Rs 64 billion only as against the target of Rs 480 billion through the sale of short-term security papers.

The State Bank of Pakistan (SBP) conducted the auction for the sale of Government of Pakistan Market Treasury Bills (MTBs) on Feb 6 and received bids amounting to Rs 1.153 trillion.

Commercial banks actively participated in the auction to park the liquidity at higher rates as the market is anticipating some decline in key policy rate in coming months.

Bids worth Rs 482.6 billion were submitted for 3-month T-Bills, Rs 80.2 billion for 6-month and 12-month MTBs fetched highest Rs 590 billion worth bids for sale of short term government papers.

However, a significant decline was witnessed in the government borrowing for fiscal deficit as government raised only Rs 63.8 billion as against the target of Rs480 billion and maturity of Rs484 billion.

The accepted amount includes Rs 22.5 billion of competitive and Rs 41.3 billion of non-competitive bids.

The cut-off yield of 3-month and 12-month MTBs fell 6 bps and 15 bps, respectively.

Federal government borrowed Rs 35.3 billion against sale of 3-month MTBs at 20.4399 percent. Six months T-bills cut-off yield was remained unchanged at 20.3952 percent for Rs 8.9 billion borrowing.

In addition, a amount of Rs 19.4 billion was raised against sale of 12-month MTBs at 20.0800 percent.

Similarly, auction for the sale of 5 & 10 Year Pakistan Investment Bonds - Floating Rate (PFL) Semi Annual was also held on Feb 06, 2024 with settlement date of Feb 07, 2024.

The government is borrowing Rs 345 billion against the sale of 5-year and 10-year long-term investment bonds.

Copyright Business Recorder, 2024