Govt raises Rs425bn, slashes T-bill yields

The government on Wednesday slas­hed the returns on treasury bills by up to 49 basis points and raised much below the staggering amount of bids, reflecting another possibility of an interest rate cut. The government raised Rs424.15 billion through the T-bill auction against a target of Rs250bn. The investors looked eager to park their surplus liquidity in the risk-free government papers as the bids reached Rs1.7 trillion. The pattern showed banks were willing to put maximum money for the longest 12-month tenor and offered Rs1.2tr bids. The government raised just Rs171.4bn for the tenor at 11.80 per cent compared to the previous auction rate of 12.29pc, a decline of 49bps.