Government borrows Rs 296.461 billion: Cut-off yield on short-term MTBs up slightly

Cut-off yield on short term government papers has increased slightly in the auction held on Wednesday. Banks and financial institutions aggressively participated in the auction of Market Treasury Bills (MTBs) conducted by State Bank of Pakistan (SBP) on November 9, 2016 and overall bids amounting to Rs 398.561 billion with realized value of Rs 390.789 billion were received for Sale of 3-month, 6-month and 12-month of MTBs.
Most of bids were received for 3-month tenure. Some Rs 291.039 billion bids received for 3-month, Rs 81.022 billion for 6-month and bid worth Rs 26.5 billion were submitted for 12-month period. The cut-off yield of 3- and 6-month MTBs witnessed upward trend in the auction, while all bids of 12-month T-bills were rejected.
Out of received bids, the federal government accepted bids amounting to Rs 296.461 billion with realized amount of Rs 292.083 billion as against the target of Rs 250 billion for this auction. Cut-off yield of 3-month MTBs fixed at 5.9463 percent, up 4 bps, with accepting bids of Rs 267 billion (realized amount). Some Rs 25.082 billion were borrowed through 6-month short term papers at 5.9471 percent, up 4 percent.