Govt raises Rs415.9bln through MTBs

KARACHI: The government on Wednesday sold debt worth Rs415.9 billion by auctioning Market Treasury Bills (MTBs), with six-month paper cut-off yield recording an uptick, central bank data showed.

The three-month treasury bills cut-off yields decreased by one basis point (bps) to 7.1597 percent, while yields had clocked in at 7.1691 percent in the auction on January 13.

The State Bank of Pakistan (SBP) sold Rs308.9 billion worth of the shortest tenor debt.

The SBP said it sold Rs101.0 billion worth of six-month T-bills. The yield on this paper rose 29 bps to 7.4900 percent from 7.2000 percent.

The cut-off yield on 12-month treasury bills stood at 7.7989 percent. The amount raised through the auction of this paper was Rs6 billion.

In this auction, investors showed greater interest in the three-month paper. Out of Rs789.3 billion, investors’ participation in this T-bill stood at Rs656.8 billion.

The central bank kept the policy rate intact at 7 percent last week. The SBP, for the first time, also provided forward guidance to facilitate policy predictability and decision-making by economic agents. The Monetary Policy Committee (MPC) expects the policy settings to remain unchanged in the near term (at least for the next policy) till economic recovery becomes more durable and the economy returns to full capacity.

The SBP expects inflation to fall within the previously announced range of 7-9 percent for FY2021 and trend towards 5-7 percent target range over the medium-term.