The Govt raised Rs. 2.068 trillion in the latest Market Treasury Bills (MTBs) auction as borrowing costs continued to ease. The auction showed that yields on all Treasury Bill tenors fell below Pakistan’s benchmark policy rate of 11.5 percent.
The Govt accepted Rs. 2,067.9 billion against a target of Rs. 2.4 trillion. Investor demand remained strong despite lower returns. The latest auction also reflected improving market expectations for interest rates.
Cut-off yields declined across all maturities compared to the previous auction. The reduction ranged between 31 basis points and 40.3 basis points, marking another drop in short-term borrowing costs.
The largest decline was recorded in the one-month Treasury Bill. Its cut-off yield fell by 40.3 basis points to 11.3968 percent.
The three-month Treasury Bill also posted a significant decline. Its yield dropped by 35.2 basis points to 11.3978 percent.
Meanwhile, the six-month Treasury Bill yield eased to 11.4375 percent after falling 31 basis points. The 12-month Treasury Bill yield declined by 35 basis points to 11.4880 percent.
The Govt relied mainly on longer-term borrowing during the auction. It raised Rs. 1.088 trillion through 12-month Treasury Bills. This amount represented more than half of the total funds accepted in the auction.
The government also secured Rs. 485.3 billion through six-month Treasury Bills. Another Rs. 396.5 billion came from three-month papers, while Rs. 98.4 billion was raised through one-month securities.
Most of the funds came from competitive bidding. The auction received Rs. 1.063 trillion through competitive bids. In addition, Rs. 1.004 trillion was accepted through non-competitive bids.
Weighted average yields also moved lower across every maturity. The one-month paper settled at 11.3917 percent. The three-month paper closed at 11.3716 percent.
The weighted average yield for six-month Treasury Bills reached 11.3904 percent. The 12-month paper settled at 11.3731 percent, showing a similar downward trend.
The latest auction suggests that market borrowing costs continue to soften. Lower Treasury Bill yields may reflect expectations of stable monetary conditions and strong demand for government securities.
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With this successful auction, the Govt secured substantial short-term financing while benefiting from lower borrowing costs. The results also indicate continued investor confidence in Pakistan’s Treasury Bill market.
