Govt Attracts Rs. 133.5 Billion Through Pakistan Investment Bonds

The government raised Rs. 133.5 billion via auction of fixed-rate Pakistan Investment Bonds (PIBs) against an auction target of Rs. 100 billion, as a result of the State Bank of Pakistan’s (SBP) unchanged interest rate. According to data from the central bank, the cut-off yields for all maturities fell below 11 percent for the first time since 15 September 2021. The cut-off yield for 3-year PIBs fell by 71 basis points to 10.79 percent. It fell by 72 basis points to 10.86 percent for the 5-year paper, and dropped by 79 basis points to 10.97 percent for the 10-year paper. The SBP attracted total bids of Rs. 766.5 billion against an auction target of Rs. 100 billion. It registered sales of Rs. 83.5 billion with the 3-year PIB, Rs. 40 billion through the 5-year paper, and Rs. 10 billion via the 10-year paper. Moreover, it received bids for 3-year PIBs totaling Rs. 273.6 billion, 5-year PIBs worth Rs. 254.6 billion, 10-year PIBs worth Rs. 235.27 billion, 15-year PIBs worth Rs. 2.05 billion, and 20-year PIBs at Rs. 1.01 billion. On the flip side, bids for 15-year and 20-year PIBs were rejected and none were received for the 30-year paper. It is noteworthy that the central bank recently kept the policy rate at 9.75 percent and signaled that borrowing rates would remain flat for the time being while referencing prior tax hikes as the main reason since these increases were aimed at lowering the country’s budget shortfalls and restoring the demand to comfortable levels.