SBP has no role in T-bills cut-off yields
KARACHI: Apropos of a news item published in our issue of Jan 24 captioned ‘State Bank cuts yield on T-bills,’ the central bank has clarified that the report gives a wrong impression that the State Bank of Pakistan (SBP) has cut the yield on T-Bills.
It clarified that the SBP does not decide the cut-off yields on Market Treasury Bills (MTBs), Pakistan Investment Bonds (PIBs) and Ijara Sukuk.
It is decided by the Ministry of Finance, Government of Pakistan.
Though the State Bank conducts auctions of MTBs, PIBs and Ijara Sukuk on behalf of the federal government, it has no role in deciding the cut-off yields on these papers.
The decision solely rests with the ministry of finance.
It may be recalled that in the Monetary Policy Statement (MPS) of Jan 31, 2009, it was announced that the ministry of finance will henceforth be responsible for deciding the cut-off yields of the primary auctions of T/s and PIBs.