The federal government Wednesday borrowed some Rs 3.467 billion through the auction for short-term government papers against the target of Rs 650 billion. Overall, very thin participation was witnessed in the auction conducted by State Bank of Pakistan (SBP) as banks and financial institutions adopted wait and see policy ahead of upcoming monetary policy to be announced on Friday. As the market is expecting some increase in key policy rate, banks prefer to participate in only three months' government papers, bankers said.
The State Bank of Pakistan (SBP), on May 23, 2018, conducted the auction for the sale of 3-month, 6-month and 12-month Market Treasury Bills (MTBs) and received bids amounting to Rs 4.994 billion with a realized amount of Rs 4.923 billion. All the received bids were for 3-month T-bills, however no bid was received for 6-month and 12-month varieties.
The federal government accepted bids amounting to Rs 3.467 billion (realized value Rs 3.418 billion) through the auction for 3-month MTBs against the target of Rs 650 billion set for this auction. The cut-off yield of 3-month T-bills remained stable at 6.2591 percent.