The federal government has set a borrowing target of Rs 5.575 trillion from domestic banks in the first quarter of the fiscal year (FY26) to address the fiscal deficit. This target marks a 40% increase compared to the Rs 3.970 trillion target set for the same period in FY25.
The State Bank of Pakistan (SBP) released the auction schedule for Pakistan Investment Bonds (PIBs) and Market Treasury Bills (MTBs) for the July-September 2025 period.Â
The government plans to meet its financing needs primarily through the sale of short-term government securities.
The government intends to raise approximately Rs 2.4 trillion through PIB sales in FY26’s first quarter. This will include Rs 1 trillion from PIB (Fixed Rate) and Rs 1.4 trillion from PIB (Floating Rate) Semi-Annual auctions. Auctions for PIB (Fixed Rate) will be held on July 16 and August 1, with a target of Rs 300 billion for each auction, and another Rs 400 billion is planned for September 2025. Additionally, six auctions for PIB (Floating Rate) will be conducted during the quarter.
To meet its overall financing target, the government also aims to raise Rs 3.175 trillion through short-term government securities. Six auctions of MTBs will be held, with the first auction scheduled for July 9, 2025, targeting Rs 1.35 trillion.
Economists suggest that lower-than-expected revenue collection has forced the government to increase its reliance on domestic borrowings to finance the fiscal deficit. The extensive borrowing has led to an interest payment burden of over Rs 8 trillion for the current fiscal year.
