Govt raises Rs1.25tr, cuts T-bill yields by 100bps

The government on Wednesday cut the yields on treasury bills (T-bills) by up to 100 basis points across different tenors, strengthening expectations for a significant softening of monetary policy in the upcoming review on Dec 16. The government remained within its auction target while the investors’ bids reached Rs1.928 trillion, indicating banks’ eagerness to park their maximum liquidity in the risk-free government securities. The investors’ bids were almost equal for short-term 3-month and long-term 12-month bonds; however, the government preferred to raise the maximum for a longer tenor. The government raised Rs1.256tr against the target of Rs1.2tr while the total bids for the auction were Rs1.9tr. Banks improve ADR to about 48pc The biggest cut of 100bps was introduced for the three-month papers to 11.99pc from 12.99pc, followed by 89bps and 5bps for six- and 12-month tenors to 11.99pc and 12.3pc, respectively. The government raised Rs105.6bn for six months and Rs322bn for three-month T-bills.