The federal government has secured Rs908 billion in new debt by selling Pakistan Investment Bonds (PIBs) and treasury bills (T-bills) to domestic commercial banks.
As per data released by the State Bank of Pakistan (SBP), the government borrowed Rs777 billion through T-bills on Wednesday, exceeding the target of Rs450 billion.Â
This borrowing helped address financing needs as banks demanded higher rates of return on longer-tenure PIBs auctioned on Tuesday.
Banks offered financing worth Rs1.68 trillion against the target of Rs450 billion, indicating ample liquidity in the financial sector. The stable markup rate compared to the previous auction held two weeks ago enabled the government to secure higher financing.Â
These funds will partially repay maturing debt worth Rs301 billion and cover elevated expenditures, primarily for interest payments on the accumulated debt.
The Ministry of Finance raised most of the funds through six-month T-bills, amounting to Rs459.5 billion, with the cut-off yield decreasing by six basis points to 19.96% compared to the previous auction on June 12, 2024.Â
Another Rs221.9 billion was raised through 12-month paper at a cut-off yield of 18.54%, down by 41 basis points. Additionally, Rs95.3 billion was borrowed through three-month paper at a stable cut-off yield of 20.15%.
The government also secured Rs131 billion through longer-tenure PIBs, though this was lower than the pre-auction target of Rs190 billion.Â
The Ministry of Finance raised Rs116.03 billion through three-year PIBs at a cut-off yield of 16.60%, down by four basis points. Another Rs13.90 billion was obtained through 10-year PIBs at 14.25%, reduced by five basis points. An additional Rs1.48 billion was borrowed through five-year paper at a stable rate of 15.44%.Â
No bids were received for 15, 20, and 30-year bonds. Commercial banks had offered total financing of Rs247 billion against the target of Rs190 billion.
