KARACHI: Cut-off Yield of short-term government securities continued to decline and reached 2022 levels on Wednesday.
The State Bank of Pakistan (SBP) conducted an auction for the sale of Government of Pakistan Market Treasury Bills (MTBs) and received bids amounting to Rs1.9 trillion as against target of Rs1.2 trillion and maturity of Rs2.034 trillion.
Overall, bids worth Rs1.256 trillion were accepted including Rs163 billions of non-competitive and yields declined by 5-100 basis points (bps).
The cut-off yield of 3-month T-Bills decreased by 100bps to 11.9999 percent, the lowest since Mar 2022. The 6-month cut-off yield fell by 89bps to 11.9999 percent, the lowest since Feb 2022 and the 12M cut-off yield dropped by 5bps to 12.2999 percent, the lowest since Feb 2022.
In a notable divergence, cut-off yields in the latest auction showed varied movement compared to secondary market rates.
According to AHL Research, the 3-month yield dropped by 16 basis points, reflecting a decline in borrowing costs for short-term debt.
Copyright Business Recorder, 2024
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