KARACHI: Investors mainly banks were in a hurry to park a record Rs2.8 trillion in the treasury bills but the government remained cool and accepted only Rs283 billion in the auction held on Wednesday.

       Despite a cut in the cut-off yield up to 59 basis points, the investors were willing to invest Rs2.109tr in 12-month papers, Rs76.7bn in 6- and Rs568bn in 3-month tenors.

       Market experts found it a clear indication that the interest rate would see a cut in the next monetary policy review. The government had a target of Rs100bn for this auction while the maturity amount was Rs122bn.

       The yields on three-, six-, and 12-month pap-ers were 20.99pc, 20.96pc and 20.84pc, respectively.

       The government had been raising trillions of rupees through T-bills during the FY24 which substantially increased the domestic debt.

       However, the massive bids provided the government a good chance to raise record-high liquidity but it did not.

       Analysts keenly watching the development were sure that the government was waiting for the State Bank’s MPC meeting expe-cted at the end of the current month. Investors sensing a decline in the interest rate placed record Rs2.8tr bids for higher returns.

       Banks are investing in risk-free papers in a highly inflated economy amid an unprecedented interest rate of 22pc.

       Published in Dawn, January 11th, 2024