KARACHI: State Bank of Pakistan (SBP) on Wednesday sold government papers on face value worth Rs2,047.8 billion through an auction of Market Treasury Bills (MTBs).
The SBP received bids worth Rs2.321 trillion for sale of 3- and 6-month treasury bills. However, no bid was received for longer tenure i.e. 12-month T-bills.
The SBP accepted three-month MTBs at realized value of Rs2 trillion and at face value of Rs2.047 trillion. However, 6-month tenure treasury bills was sold at Rs95 million on realized value and Rs100 million on face value.
Experts said that banks had sufficient liquidity to invest attractive government papers after hike in discount rate.
The SBP in the latest monetary policy announcement enhanced the policy rate by 150 basis points to 10 percent.
They said that the market expected more hike in interest rate in next announcement. They further said that this was the reason the banks had concentrated on short-term treasury bills.
The cut-off yield for three months papers was at 10.3013 percent higher than the policy rates. The SBP also accepted bids for six-months at 10.3499 percent cut-off yield which was also higher than the policy rate.
The target for this auction was set at Rs100 billion. The total auction target for three months (December-February) was set at Rs3.5 trillion.