Govt raises Rs518 billion through treasury bill auction

Profit reported that the government collected Rs518 billion on Wednesday through treasury bill sales and non-competitive bids, citing the State Bank of Pakistan. The highest cut-off yield stood at approximately 12%, while total bids reached Rs2.192 trillion, most of them placed by commercial banks. Only Rs237.6 billion came through the auction itself, and non-competitive bids exceeded it for the first time at Rs280.3 billion.

Provincial government bids of as much as Rs200 billion for three-month papers likely contributed heavily to that non-competitive total. Three-month bills drew the largest share, with Rs118.7 billion raised at auction and Rs230.8 billion through non-competitive channels. The report links the heavy bidding to banks preferring to hold surplus cash in government securities instead of lending to a private sector viewed as too risky.

Banks and corporates deployed just 11% of their bids, and high interest rates continue to discourage long-term private borrowing. One-month papers yielded 11.46% and raised Rs38 billion, while 12-month papers at 11.99% accepted Rs52.6 billion. The SBP reiterated in its policy statement that inflation control outweighs growth, while the government relies on higher remittances, targeting $44 billion for FY27.