The situation has altered due to the steep drop in interest rates and decreasing inflation. Just one day prior, the government had rejected every bid for the Treasury Bill auction. This was a blatant attempt by the government to lower borrowing costs, which devour all tax income collected in order to pay down its enormous debt, to signal the financial markets.
Following the rejection of every T-bill bid, the interbank market was too liquid.
According to the State Bank of Pakistan, the government raised Rs83.3 billion, as opposed to the Rs200 billion aim, during Thursday’s fixed local currency bond/PIB sale. The three-year bond’s return was reduced to 12.9 percent by 335 basis points.
government only raises Rs83 billion versus a Rs200 billion auction objective.
