The State Bank of Pakistan yesterday reduced the cut-off yield on treasury bills (T-bills) by up to 50 basis points, while the government raked in the entire amount offered by banks.
The T-bills were sold for the first time after the monetary policy announcement and the auction reflected the decision taken in monetary policy. The policy interest rate was cut by 50 basis points to 9.5 per cent.
Dealers said the market was expecting a cut in the T-bills rates after the reduction of policy interest rate and particularly after a big strange cut in the rates of Pakistan Investment Bonds (PIBs).
The cut-off yield on three-month T-bills was reduced by 47 basis points to 9.45pc; yield on 6-month papers was cut by 48 basis points to 9.49pc, and for 12-month paper, yield was slashed by 50 basis points to 9.49pc.
The market was still filled with speculations that the interest rate may see another cut in the next policy in January as it may result in higher investment for long-term papers.
