The federal government Wednesday borrowed some Rs 785 billion through the auction for short-term government papers. The State Bank of Pakistan (SBP) conducted the auction on Oct 11, 2017 for the sale of 3-month, 6-month and 12-month Government of Pakistan Market Treasury Bills (MTBs) through Primary Dealers.
Banks and financial institutions aggressively participated in the auction and in response to the tender, overall some Rs 935.598 billion (Rs 922.810 billion realized value) were submitted for 3-month and 6-month MTBs against the target of Rs 650 billion. As the key interest rate is at a lower level, banks and financial institutions are avoiding investment in long-term bills and accordingly, no bid was received for 12-month T-bills.
Some Rs 931.818 billion worth bids were submitted for 3-month MTBs while 6-month government papers fetched bid amounting to Rs 3.78 billion. The federal government borrowed an amount of Rs 796.026 billion with a realized value of Rs 785.141 billion against the sale of 3- and 6-month MTBs. The borrowed amount is some Rs 146 billion higher than the actual target of Rs 650 billion set for this auction. Some Rs 781.471 billion (realized value) were raised through 3-month T-bills at 5.9910 percent cut-off yield. A cut-off yield of 6.0109 percent was set for 6-month MTBs with accepted bids of Rs 3.67 billion.