The government raised Rs. 467 billion against an initial target of Rs. 550 billion and maturity of Rs. 429 billion in the auction, according to the data released by the State Bank of Pakistan (SBP).
The government raised Rs. 339 billion against a targeted amount of Rs. 150 billion for the three-month paper in the competitive auction, and it raised Rs. 10 billion against a target of Rs. 200 billion for the six-month paper.
Moreover, it raised Rs. 65 billion against a target of Rs. 200 billion through the 12-month bond during the auction. The cut-off yield for 12 month T-bills rose by 0.39 bps.
A further breakdown of the official numbers indicates that the government also raised Rs. 53 billion through non-competitive bids, which took total proceeds to Rs. 467 billion.
The government had set Rs600bn target for the auction while the maturity amount was just Rs27.4bn that means the government was willing to raise additional Rs572.6bn.
However, the government raised additional Rs440bn through the t-bills.
The bid pattern published by the State Bank of Pakistan also showed private sector’s increasing appetite for government papers.
In the previous auction, the total bids amounted to Rs953.4bn, which jumped to Rs1.65tr in the latest auction. The government had raised Rs755.5bn in the previous auction.
The huge flow of banking liquidity towards government papers has badly damaged the private sector credit off-take. In the first two months of the current fiscal year, the private sector kept retiring debts instead of increasing net borrowing.
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