• Misses target by Rs. 13.5 b
• Over-borrowing 91-day bills lifts yields to 9.34%

The Government raised Rs. 86.48 billion at Wednesday’s (28 October) Treasury bill auction, falling Rs. 13.52 billion short of the Rs. 100 billion on offer, despite receiving bids worth more than twice the offered amount.

According to the Public Debt Management Office (PDMO), the auction drew bids totalling Rs. 225.08 billion. However, authorities accepted only a fraction of the bids for the longer tenors, choosing instead to raise the bulk of the funds through the shortest-dated bill.

The 91-day bill accounted for almost four-fifths of the total accepted. Against an offer of Rs. 50 billion, the PDMO received bids worth Rs. 130.6 billion and accepted Rs. 68.1 billion, exceeding the offered amount by around Rs. 18 billion. The weighted average yield on the 91-day bill rose by 2 basis points to 9.34%, from 9.32% at the previous auction.

In contrast, the Government accepted just Rs. 9.35 billion of the Rs. 25 billion offered in 182-day bills, despite receiving bids worth Rs. 58.97 billion. The yield on the tenor held steady at 9.44%.

Similarly, only Rs. 9.04 billion was accepted of the Rs. 25 billion offered in 364-day bills, against bids of Rs. 35.51 billion, with the yield unchanged at 9.95%.

The pattern of acceptances suggests authorities were unwilling to accept higher rates on the six-month and one-year bills, opting instead to absorb more short-term funding at a marginally higher cost.

The settlement date for the bills was Friday (30 October).