KARACHI: Following the federal government’s directives, the State Bank of Pakistan (SBP) has rejected all bids of Pakistan Market Treasury Bills (MTBs) received in the auction held on Wednesday.

Overall, investors placed total bids of Rs 1.425 billion for 3-, 6- and 12-month MTBs. The 12-month T-Bill saw significant interest, with bids totaling Rs 925 billion, representing 65 percent of the total bid amount. For the 3-month T-bills, bids amounting to Rs 221.5 billion were received, while 6-month bids fetched a total of Rs 278.6 billion worth bids.

According to AHL Research, the bid pattern indicated that, had the government decided to raise the target amount, the cut-off yields would have declined by 29-101 bps.

MTBs auction: govt borrowing well above target

With the PIB fixed-rate auction scheduled for Thursday, analysts believed that after MTBs auction rejection, participants will bid at lower rates, ensuring liquidity is invested.

This trend will help the government lower its borrowing costs while ensuring its debt profile remains tilted towards longer-term instruments, they added.

Copyright Business Recorder, 2024