The rates of treasury bills were again reduced on today, while the amount raised through the auction was double than the target fixed for the auction.
As government borrowing from commercial banks continues, the treasury bills have, in fact, become more attractive since the rates fell drastically during the last couple of months.
The three-month T-bills were sold at a cut-off yield of 8.37 per cent. The rate was dropped by 5 basis points while the amount raised stood at Rs18.2bn.
The rate of benchmark six-month T-bills was cut by 9 basis points to 8.37pc for an amount of Rs37.2bn. The highest amount of Rs47.1bn was raised for 12-month paper while the yield was cut by 9 basis points to 8.29pc.
The investment trend shows that banks were still eager to buy long-term government papers, reflecting their approach towards the interest rate scenario.
Investors still believe that the policy interest rate could see another cut in future in the wake of prevailing low inflation and low oil prices in the international market. The government raised a total of Rs102.6bn through the auction while the target was Rs50bn which means the fiscal pressure is still high, and that more money is needed to meet the fiscal demand.
