{
  "id": 11096705,
  "title": "T-bill yields jump beyond policy rate",
  "url": "https://urgent.news/2026/10/01/t-bill-yields-jump-beyond-policy-rate",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-01T02:02:28.000Z",
  "source": {
    "name": "Dawn Business",
    "slug": "dawn-business",
    "url": "https://www.dawn.com/news/2033864/t-bill-yields-jump-beyond-policy-rate"
  },
  "original_language": "en",
  "account": "KARACHI: The government increased the highest yields on treasury bills by up to 75 basis points, surpassing the State Bank of Pakistan’s 11.5% policy rate. In the recent T-bill auction, the government raised rates on all tenors, causing speculation of a potential interest rate hike at the upcoming SBP Monetary Policy Committee meeting on October 26. The six-month benchmark bill saw the largest increase of 75bps, surging to 12.45% from 11.70% in the previous auction on September 16. The government collected Rs88.3 billion through this tenor. The three-month T-bill rate rose 61bps to 11.99%, up from 11.38% in the prior auction. The government raised Rs143.86 billion for this tenor. The smallest increase of 45bps lifted the 12-month T-bill rate to 12.49%, 99bps above the policy rate. This significant gap between T-bill yields and the policy rate caught market participants off guard and sparked speculation about a possible policy rate increase. Elevated inflation, currently at 11.1% in August and expected to stay near 10.75% in September, and high international oil prices, including hitting $100 per barrel, also point to potential inflationary pressures. Pakistan imports about 70% of its fuel needs, and the ongoing Gulf war continues to strain energy costs. The country's foreign and domestic investments remain at pre-war levels since February 28, 2026, as risks have increased, slowing economic growth and adding to inflation. Total bids received in the auction reached Rs2.726 trillion, with the government raising Rs880 billion — Rs400.25 billion through competitive bids and Rs479.8 billion through non-competitive bids. Financial experts suggest that the interest rate could be raised at the next monetary policy review if inflation stays high around 11%, while some believe the conditions may now warrant a higher policy rate. \"If cheaper money is available amid higher inflation, it will further fuel inflation, which is not what the government or the State Bank wants,\" remarked a financial expert.",
  "summary": "KARACHI: The government on Wednesday raised the cut-off yields on treasury bills by up to 75 basis points, significantly surpassing returns on risk-free papers above the State Bank of Pakistan’s policy rate of 11.5 per cent. In the latest T-bill auction, the government raised profit rates on all tenors, fuelling speculation in the financial market about a possible interest rate hike at the next…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}