SBP raises Rs186.8bn from T-bill, PIB auctions

KARACHI: The State Bank of Pakistan (SBP) has reported that the government raised a collective amount of Rs186.8 billion from the auction of Pakistan Market Treasury Bills (T-bills), and Pakistan Investment Bonds (PIBs), with both auctions held on Wednesday. 

Specifically, the government raised Rs62.5 billion through T-bills, against the auction target of Rs150 billion, and Rs124.3 billion through the sale of floating-rate PIBs. 

The SBP conducted the auction for the sale of 3-month, 6-month and 12-month T-bills and received bids amounting to over Rs562.3 billion.

Bids worth Rs158.9 billion were received for 3-month T-bills, Rs202.2 billion for 6-month T-bills, while 12-month government papers fetched bids amounting to Rs201 billion.

Of the received bids, the federal government raised Rs2.4 billion for 3-months, Rs12.2 billion for 6-months and Rs47.8 billion for 12-months.

The total acceptance in the auction, including non-competitive bids, was Rs78.8 billion.

The cut-off yields were all lower than the yields recorded in the previous auction on June 4.  The cut-off yield for 3-month bids was at 7.9pc, down from 8.12pc. The yield for 6-month bids was at 7.4pc, down from 7.9pc, while the yield for 12-month bids stood at 7.36pc, down from 7.71pc. 

Like the previous auction, the bidding was concentrated in the long term 12-month papers. This is opposed to the trend that defined most of last year and the beginning of this year, of investing in short term 3-month T-bills.

Meanwhile, in PIBs, out of the Rs84.1 billion for the 3-year PIB, SBP accepted Rs60.3 billion. For 5-year PIB, the central bank accepted Rs34.5 billion out of Rs48.5 billion, whereas it accepted Rs29.5 billion for 10-year PIB, out of Rs31.5 billion.

The yields on 3-year bonds had a cut-off margin of 45 basis points over/under the benchmark; the cut-off margin for 5-year bonds was 49 basis points; while the cut-off margin for 10-year bonds was 70 basis points. 

The lower yields are a reflection of the central bank aggressively cut interest rates in the last three months, slashing the policy rate from 13.25pc to 12.5pc on March 17, from 12.5pc to 11pc on March 24, from 11pc to 9pc on April 16, and finally from 9pc to 8pc on May 15.

The next auction date for both T-bills and PIBs-floating rate is set for June 30. 

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Meiryum Ali
Meiryum Ali
The author is a member of the staff and can be reached at [email protected]
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