The government raised Rs882 billion through the latest auction of Market Treasury Bills (MTBs) on Wednesday, significantly exceeding its pre-auction target of Rs400 billion, while yields remained largely stable across most tenors.

According to the auction results, total bids amounted to Rs2.287 trillion, reflecting strong investor participation.

The cut-off yield on the one-month T-bill remained unchanged at 11.3504%, while the three-month paper also held steady at 11.5149%.

Meanwhile, yields on longer-duration papers eased slightly. The six-month T-bill yield declined by 10 basis points (bps) to 11.7000%, while the 12-month yield fell by 4 bps to 11.949%.

The auction outcome suggests that market participants expect the State Bank of Pakistan (SBP) to maintain its policy rate in the near term, despite easing inflation.

Pakistan's consumer inflation slowed to 9.2% in July, down from 11.07% in June. However, analysts believe inflation could return to double-digit levels in the coming months, reducing the likelihood of another policy rate cut.

Last week, the SBP kept its benchmark policy rate unchanged at 11.5%, citing inflationary pressures, external sector risks, and heightened geopolitical uncertainty.

The central bank expects inflation to remain above its medium-term target range of 5%–7% over the next few months before gradually easing toward the upper end of the target by June 2027, although the outlook remains subject to risks including global energy prices, administered energy tariff adjustments, adverse weather conditions, and potential fiscal slippages.