Karachi: The federal government raised PKR 323 billion through the auction of market Treasury bills (T-bills) on Wednesday, surpassing the pre-auction target of PKR 275 billion. The auction results, published by the State Bank of Pakistan (SBP), also showed a slight decline in yields across all tenors, indicating strong demand for short-term government debt.
According to SBP data, the total bids received amounted to a substantial PKR 2.21 trillion against the maturing amount of PKR 578 billion. The cut-off yields saw a moderate dip between 5 to 9 basis points (bps). The yield on the one-month T-bill declined by 9bps to settle at 11.00%, while the three-month yield fell 5bps to 10.99%. Yields on the six-month and 12-month tenors dropped by 7bps each, to 10.89% and 10.87%, respectively.
In a separate auction for floating-rate Pakistan Investment Bonds (PIBs), the government raised PKR 156 billion against a target of PKR 200 billion, with total participation reaching PKR 743 billion.
Financial analysts suggest that falling T-bill yields below the SBP’s current policy rate of 11% point to market expectations of an interest rate cut in the near term. “The auction results reflect tight control on government borrowing despite the fiscal year’s end and support the outlook for monetary easing,” said Awais Ashraf, Director of Research at AKD Securities.
The SBP, in its recent monetary policy statement, held the policy rate steady but flagged inflation risks tied to regional conflicts, energy price adjustments, and global commodity trends. Inflation surged to 3.5% year-on-year in May after months of moderation. Analysts at Topline Securities project June inflation between 3.5% and 4%, with FY25 average inflation expected at 4.64% — significantly lower than the 23.41% recorded in FY24.
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