Islamabad, Jan 26: The 1-Year Treasury Bill (T-Bill) rate has fallen to its lowest point in approximately three years, now standing at 11.34 percent, marking a significant decline from its peak of 24.73 percent just one and a half years ago. This drop in the rate is largely attributed to falling inflation, according to financial analysis from Topline Securities.
The most recent bond auction held on Wednesday reflected this downward trend. Cut-off yields for 3-month (3M), 6-month (6M), and 12-month (12M) T-Bills decreased by 20 basis points (bps), 39 bps, and 45 bps, respectively, settling at 11.5887 percent, 11.4048 percent, and 11.3459 percent.
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The auction was met with overwhelming demand, as bids amounted to Rs. 1,401 billion, significantly exceeding the targeted Rs. 350 billion. In response, the State Bank of Pakistan accepted Rs. 326 billion in bids, signaling strong investor confidence despite the declining interest rates.
The reduced rates reflect a broader trend of easing monetary conditions, which have been positively influenced by falling inflation and the central bank’s monetary policy adjustments aimed at stabilizing the economy. The drop in the T-Bill rate is expected to have implications for government borrowing costs, as well as investor behavior in the coming months.
