Govt Raises Rs. 501 Billion Via T-Bills, Cut-Off Yields Down by up to 60 BPS

The cut-off yields on Treasury Bills (T-Bills) went down by up to 60 basis points (bps) in the auction of the paper held on Wednesday. According to the data released by the State Bank of Pakistan (SBP), the government raised Rs. 501 billion against a target of Rs. 360 billion in the auction. Official data indicates that the cut-off yield for the 3-month T-Bills went down by 60 bps to 21.0001 percent. The cut-off yield for the 6-month T-Bills went down by 29 bps to 21.0000 percent while the cut-off yield for the 12-month T-Bills declined by 31 bps to 20.1001 percent. The government raised Rs. 122.40 billion for the three-month paper in the competitive auction. It also raised Rs. 70.42 billion and Rs. 182.98 billion for the 6-month and 12-month T-Bills respectively. A further breakdown of the official numbers indicates that the government also raised Rs. 124.71 billion through non-competitive bids. This took the total amount raised during the auction to Rs. 501 billion. In a post on X, Arif Habib Limited (AHL) CEO Shahid Ali Habib said that the decline in cutoff rates reflects the market’s expectation of a rate cut in the upcoming monetary policy, supported by low inflation, a narrowing current account deficit, and other economic indicators showing signs of recovery.