T-bills, A Double-Edged Sword?
State Bank of Pakistan (SBP) collected PKR 853 billion through T-bills auction.
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The Federal government has ramped up its efforts to increase investments in securities. These efforts focus on bonds, T-bills, etc, and arise in the wake of the rising budget deficit.
The government uses various financing tools to stay afloat during the financial year. One of these ways includes loaning money from domestic and foreign actors. T-bills or Marketable Government Securities are one such way for the Government of Pakistan to generate revenue.
For the most recent auction, T-bills were sold at a lower cut-off rate than usual. Following suit, the rate of return remains unchanged in the wake of rising inflation. But corporate investments and banks’ interest in the securities remains undeterred albeit the state of our economy. This points towards high liquidity in the money market, which makes banks and corporations comfortable enough to enjoy returns on their money.
On the other hand, higher securities signal lesser cash flow in the economy. This further insinuates lower investments in the private sector, painting a gloomy picture for future economic growth.
GRAPHICS OF THE DAY
Securities Maturity Date and Trade Volume
Pakistan's Public Debt Components/Composition
INSTAGRAM POSTS
Foreign Direct Investment September 2022 — www.instagram.com
⚫ Foreign Direct Investment in Pakistan decreased by 66% compared to September 2021 and by 24% compared to August 2022
⚫ On a year-on-year basis net FDI decreased by 66%
⚫ On a month-on-month basis net FDI decreased by 24%
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Exports September 2022 — www.instagram.com
⚫ Exports decreased by 9.5% during September 2022 compared to August 2022
⚫ Exports decreased by 4% compared to September 2021
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Imports September 2022 — www.instagram.com
⚫ Imports decreased by 16.8% during September 2022 compared to August 2022
⚫ Imports decreased by 18.6% compared to September 2021
View more
TWEET
What Else We’re Reading
Dar says Pakistan may buy discounted Russian oil (Al Jazeerah)
Pakistan’s troubles justify slump in bond prices: JPMorgan (Dawn)
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