KARACHI, Nov 14: The cut-off yield on the treasury bills were raised on Wednesday against the trend of the last two auctions. The rates were increased for three- and six-month papers while the rate for 12-month T-bills was reduced.

The trend of slashing the treasury bills rates was set in the wake of falling inflation (CPI) eased to 7.7 per cent in October.

Some market experts said it was a strange move particularly when the inflation had been declining. However, they said the decline in the yield was not big enough to reflect any change in the coming weeks or month.

Before this sudden increase in the cut-off yield, analysts had been predicting a cut in the SBP policy rate in the next monetary policy review due early December.

The State Bank reported that the cut-off yield for three-month and six-month papers was raised to 9.27 and 9.31 per cent from 9.23 and 9.27 per cent, respectively. The yield on 12-month paper was cut by 0.37 per cent.

The government raised Rs140 billion through this auction. A leading dealer said the cut in the yield could be a temporary step since the falling inflation tells a different story.