Govt raises Rs515bn as banks overbid

The government surpassed its target in Wednesday’s treasury bill auction, raising Rs515.2bn, with banks offering more than three times the targeted amount. However, despite the oversubscription, the cut-off yields remained largely unchanged, with a slight reduction of 14bps for one-month papers, bringing the yield down from 10.89pc to 10.75pc. The government raised Rs402.7bn through the direct auction, while an additional Rs112.5bn was secured via uncompetitive bids. The original target for the auction was Rs400bn, but the strong demand from banks and the corporate sector, driven by excess liquidity, pushed the total raised amount well beyond the target. Bids for the treasury bills amounted to Rs1.477 trillion, reflecting the abundance of liquidity within the banking system.