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July 16, 2020

State Bank sells Rs249.2bln worth of MTBs

Business

July 16, 2020

KARACHI: The State Bank of Pakistan sold Rs249.2 billion worth of Market Treasury Bills at an auction on Wednesday, while the yields declined across the board.

Raised amount was higher than the pre-auction target of Rs100 billion. Three-month treasury bills cut-off yield fell to 6.5598 percent from 6.8488 percent in the previous auction held on June 30. The SBP sold Rs103.1 billion worth of the shortest tenor paper. Six-month yield stood at 6.5700 percent, which was lower than the previous yield of 6.6599 percent. The SBP sold Rs62.250 billion of six months treasury bills. The cut-off yield on 12-month paper was 6.6001 percent. That compared with 6.8500 percent in the previous auction. The raised amount through the auction of this paper was Rs83.850 billion. “The decline was lesser than expected,” said Mohammed Sohail, chief executive officer at Topline Securities. “The government borrowed more than the target. Ample liquidity with limited lending opportunities forcing banks and investors to park funds in low yielding T-Bills.” The central bank cut the policy rate by 100 basis points to seven percent last month, whereas consumer price index inflation rate edged up slightly to 8.6 percent year-on-year in June from 8.22 percent in the previous month.