KARACHI: The margin on short-term government securities declined by up to 90 basis points (bps) in the Treasury Bills (T-bills) auction held on Wednesday, reflecting market reaction to the recent monetary policy easing.
On behalf of the federal government, the State Bank of Pakistan (SBP) invited tenders for the sale of 1-month, 3-month, 6-month, and 12-month Government of Pakistan Market Treasury Bills (MTBs) through primary dealers on May 14, 2025, with settlement scheduled for May 15, 2025.
The auction witnessed robust participation by the primary dealers, with total bids amounting to Rs 1.987 trillion. The highest interest was observed in the 1-month T-bills, attracting bids worth Rs 667.6 billion. Bids for other tenors included Rs 453.55 billion for 3-month, Rs 225.15 billion for 6-month, and Rs 641.6 billion for 12-month MTBs.
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The federal government accepted bids worth Rs 664 billion, including Rs 102 billion in non-competitive bids, exceeding the auction target of Rs 550 billion, but falling short of the maturing amount of Rs 716 billion.
The cut-off Yields on different bonds decreased by 66-90bps, with the current yields standing at 11.25 percent for the 1-month T-Bill, 11.24 percent for the 3-month, 11.28 percent for the 6-month MTBs, and 11.35 percent for the 12-month T-Bill.
The decline in yields is largely attributed to the 100-bps cut in the SBP’s policy rate announced earlier this month by the Monetary Policy Committee. This policy shift has led to improved investor sentiment and expectations of further monetary easing.
Copyright Business Recorder, 2025
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