KARACHI: The federal government has borrowed 100 percent above the target in the Market Treasury Bills (MTBs) auction held on Wednesday.

The tentative target for the borrowing through auction of 3-, 6- and 12-months T-bills was set at Rs 340 billion; however, the federal government borrowed Rs 704 billion in the auction held of March 20, 2024.

Analysts said that investors aggressively tried to park liquidity at higher yields amid expectation of rate fall in the future. The Monetary Policy Committee (MPC) of the SBP has kept the policy rate unchanged at 22 percent in its meeting held on Monday, however, the market is expecting rate cut in the second quarter of this year.

The auction for the sale of short term government papers, conducted by State Bank of Pakistan witnessed healthy participation. Overall bids worth Rs 992.406 billion including Rs 740 billion for 3-month, Rs 82.8 billion for 6-month and Rs 169.45 billion for 12-month MTBs were received.

The federal government raised Rs 704.38 billion including Rs 55.157 billion of non-competitive bids as against the target of Rs 340 billion and maturity of Rs 369 billion.

Interestingly, yields of 3-month and 12-month T-Bills fall ranging 26 to 60 basis points (bps), respectively, in the auction.

Copyright Business Recorder, 2024


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