Experts noted that the State Bank of Pakistan’s provision of Rs2.7 trillion in profit to the government had transformed the banking sector, which is wholly dependent on risk-free and highly yielding government assets, and that the local money market was therefore flooded with excess liquidity.
The rejection of every bill at the Sept. 18 auction resulted in a significant decline in yields over a protracted period.
“Three-month yields are currently at 15.62 percent, six-month at 14.47 percent, twelve-month at 13.34 percent, three-year at 12.14 percent, five-year at 11.98 percent, and ten-year at 11.89 percent, down 2-3 percent from the previous auction,” stated Topline Securities.
With bids of Rs860 billion, the government raised Rs244 billion in today’s T-bill auction, versus a target of Rs250 billion and a maturity of Rs341 billion.
