‘Unusual’ T-bill auction sees govt raise Rs915bn

The government borrowed over Rs915 billion from banks on Wednesday, but the unscheduled treasury bill auction triggered speculation about the sudden need for this amount. The State Bank reported that bids for the short-term T-bills for 22 days totalled Rs1,900 billion, while the government raised Rs915.6bn. This reflects both the government’s immediate needs and the surplus liquidity in banks. However, the bankers had no clue why the government borrowed such a significant amount, which could be used to settle the payments before the end of this fiscal year. “There is a possibility that the excess amount is required to settle the maturities of the domestic bonds before 30th June,” said a money market expert. The government did not disclose the purpose of raising liquidity through the auction of domestic bonds. However, recent developments suggest that the government is negotiating with banks to borrow Rs1.2 trillion to settle the power sector circular debt.