Govt raises Rs835bn without a cut in T-bills rates
Without changing the cut-off yields on treasury bills (T-bills), the government raised Rs835 billion, exceeding the auction target, on Wednesday. Financial market experts said the auction result was up to expectations since the market has already incorporated the expected cut in the interest rate. The State Bank of Pakistan (SBP) is scheduled to announce a monetary policy for the next two months on Sept 12, and analysts and researchers are sure about a significant cut in the interest rate. Inflation eased to single digits in August. Most financial sector experts said the interest rate cut was necessary but differed on quantum. Experts said the steep inflation fall to 9.6 per cent created space for up to a 200 basis points (bps) cut in the SBP policy rate. However, most experts believe the interest rate may see a 150bps reduction.