KARACHI: The cut-off yields on treasury bills were increased by up to 34 basis points, surpassing the policy interest rate in the auction held on Wednesday.

Unlike previous auctions, bids for this auction were not as high as in the past. Experts believe that banks were confident the government would borrow on a large scale to reduce the circular debt.

The government is reportedly negotiating with banks to extend loans of up to Rs400 billion to address the ever-growing circular debt. The government is willing to borrow at 11 per cent, one percentage point lower than the policy rate, while some banks were unwilling to lend at this rate, as it is below the 12pc policy........

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