Banks invested heavily in short-term treasury bills yesterday keeping in view the possibility of a change in the interest rate this month.
The State Bank reported that investors bought T-bills worth Rs196 billion while three-month T-bills attracted Rs154bn out of the total investment. The government’s target for the auction was Rs150bn but the investment exceeded the target.
Fund managers said the banks expecting a cut in policy rate in the next monetary policy due this month were investing in short-term period to remain liquid.
However, the main inflation based on Consumer Price Index (CPI) stood at 7 per cent in August compared to 8.5pc in the same month last year, enlivening hopes for a downward revision in the interest rate.
