KARACHI: The government rejected all bids for treasury bills on Wednesday, apparently to borrow at a cheaper rate in the next auction.
The State Bank of Pakistan reduced its policy rate by 200 basis points to 17.5 per cent on Sept 12, and cut-off yields on T-bills were already at this rate before the announcement.
The market experts termed the move surprising since the government depends mainly on banking money to run its day-to-day affairs. Most of the revenue goes for debt servicing each year.
The investors placed total bids of Rs1,425bn, three times higher than the target.
The 12-month T-bills saw significant interest, with bids totalling Rs925bn, representing 65pc of the total bid amount. For the three-month T-bills, bids amounted to Rs222bn, while six-month papers attracted Rs279bn, accounting for 20pc of the total bids.
Published in Dawn, September 19th, 2024
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