The federal government on Wednesday borrowed some Rs 44.22 billion through the auction of Market Treasury Bills (MTBs). The State Bank of Pakistan (SBP) conducted the last auction of MTBs for this quarter on December 24. The auction attracted heavy participation from banks. According to SBP, the MTBs' auction fetched some Rs 97 billion worth (realised) bids against the target of Rs 75 billion set by the federal government for this auction.
In response to the SBP tenders for sale of 3-month, 6-month & 12-month of Government of Pakistan Market Treasury Bills, overall Rs 96.9 billion (realised amount) with a face value of Rs 105.655 billion bids were received through Primary Dealers from December 24, 2014. However, bids worth Rs 44.22 billion realised amount with a face value of Rs 48 billion were accepted. The accepted amount is less than the target. Most of the participation was witnessed in the 12-month MTBs, which depicts that banks are expecting some reduction in the key policy rate in near future.
A cut-off yield of 9.4789 percent was set for the sale of 3-month MTBs and bids accepted worth Rs 900 million with a face value of Rs 919 million. For the 6-month, the SBP accepted Rs 6.294 billion bids with 9.481 percent cut-of yield. Similarly, a cut-off yield of 9.4731 percent was set for the 12-month T-Bills with bidding amount of Rs 37.031 billion. Analysts said that the two positive developments, firstly reduction in the international oil prices and secondly the arrival of foreign inflows, have somewhat reduced the expected pressure on the external and fiscal accounts from earlier assessment.