Govt raises Rs152bn through T-bills
KARACHI: The government raised Rs152 billion on Wednesday through treasury bills auction reflecting the banks’ investment pattern and the government’s reliance on borrowing from banking system.
The State Bank reported that the maximum Rs104 billion were invested in the one-year, Rs47 billion in six-month and Rs1 billion in three-month treasury bills.
Investing huge amount in one-year papers reflected banks’ confidence that interest rate would stay steady for the period. In July the State Bank had reduced the policy interest rate (discount rate) by 50 basis points to 13.5 per cent.
Analysts however believe that the interest rate may see more cut in the coming monetary policy review on October 8.
One of the strongest reasons for likely cut in the policy rate is the lower than expected inflation in August.
The discount rate was kept as high as 14 per cent for long period fearing high inflation that remained in double digits around 13 to 14 per cent.
However, most of the analysts believe that the low inflation in August was the result of base-year change.