The federal government raised Rs. 2.068 trillion through its latest Market Treasury Bills (MTBs) auction, with borrowing costs falling across all maturities to levels below the State Bank of Pakistan’s benchmark policy rate of 11.5 percent.
According to the auction results, the government accepted Rs. 2,067.9 billion against a target of Rs. 2.4 trillion. Cut-off yields declined across all tenors, falling between 31 and 40.3 basis points compared to the previous auction, reflecting improved investor confidence and easing interest rate expectations.
The largest drop was recorded in the one-month Treasury Bill, where the cut-off yield fell by 40.3 basis points to 11.3968 percent.
Meanwhile, the three-month T-Bill yield declined by 35.2 basis points to 11.3978 percent, while yields on six-month and 12-month papers eased to 11.4375 percent and 11.4880 percent, down 31 basis points and 35 basis points, respectively.
The government relied primarily on longer-term borrowing, raising Rs. 1.088 trillion through 12-month Treasury Bills, which accounted for more than half of the total funds secured. It also borrowed Rs. 485.3 billion through six-month bills, Rs. 396.5 billion via three-month securities, and Rs. 98.4 billion through one-month papers.
Of the total amount raised, Rs. 1.063 trillion came from competitive bids, while Rs. 1.004 trillion was accepted through non-competitive bids.
The auction also recorded lower weighted average yields across all maturities. One-month, three-month, six-month, and 12-month Treasury Bills settled at 11.3917 percent, 11.3716 percent, 11.3904 percent, and 11.3731 percent, respectively, indicating a broad decline in government borrowing costs.
