Margin on short-term government papers declined slightly in the auction held Wednesday. The State Bank of Pakistan (SBP), on February 17, conducted the auction for sale of 3-, 6- and 12-month Market Treasury Bills (MTBs) and received bids amounting to Rs 489.308 billion with realised value of Rs 467.189 billion. The received bids were higher than the target of Rs 250 billion, which included Rs 213.217 billion of the maturing amount and Rs 36.783 billion additional amount.
However, the cut-off yield of MTBs witnessed a downward trend in the auction held Wednesday and margin on all short-term government papers fell up to 4 basis points (bps). In the previous auction held on February 3, 2016, yield on all papers rose by some 4 to 9 bps as the key policy rate remained stable in the monetary policy announced in January this year.
Some Rs 116 billion bids were received for 3-month, Rs 50.712 billion for 6-month and some Rs 322.526 billion for 12-month period. Out of the received bids, the federal government accepted bids amounting to Rs 196.732 billion with a realized amount of Rs 186.457 billion against the target of Rs 250 billion set by the government for this auction.
The cut-off yield of 3-month MTBs was fixed at 6.2144 percent down from 6.2591 percent with accepting amount of Rs 26.355 billion (realized). Bids amounting to Rs 921.405 million were accepted for 6-month MTBs and its cut-off yield was set at 6.2239 percent, up 4 bps. While, the cut-off yield of 12-month T-bills increased 3 bps to 6.2419 percent and bids amounting to Rs 159.181 billion (realized amount) were accepted.
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