The bid pattern shows that investors are also keen on investing in the short-term T-bills. The government raised the highest amount of Rs347.4bn for benchmark six-month T-bills.
Market experts believe that the government has been raising money from the domestic market for a short tenure. They think the government is discouraging investors from opting for the long-term Pakistan Investment Bonds (PIBs), which offer higher returns of up to 10.9pc for 10-year bond, and had already resulted in piling up of huge domestic debts.
The first quarterly report of the State Bank of Pakistan revealed that debt servicing for the entire FY20 was Rs2,387bn. The steep rise in interest payments consumed over 73 per cent of the Federal Board of Revenue taxes and constituted nearly 53.8pc of total federal expenditures.
The three-month T-bills cut-off yield was 7.4pc compared to 7.47pc in the previous auction — a cut of 7bps. The government raised Rs242.7bn against the bids of Rs545.4bn.
