The federal government plans to borrow Rs4.9 trillion from commercial banks in the first quarter of 2026, according to the auction calendar released by the State Bank of Pakistan (SBP). This borrowing will be carried out through treasury bills (T-bills) and Pakistan Investment Bonds (PIBs).
The government intends to raise Rs3.25 trillion from short-term T-bills, which have maturities of one, three, six, and twelve months. In addition, it aims to borrow Rs1.65 trillion by issuing PIBs with maturities ranging from two to fifteen years.
The auction calendar reflects a cautious borrowing approach, with T-bill targets kept below maturities to help reduce short-term liquidity pressures. The preference for six- and twelve-month T-bills is intended to offer flexibility in funding, especially in light of expected monetary easing.
The PIB issuance will focus on medium-term maturities, with minimal long-term bonds and selective use of floating-rate instruments. This strategy aims to manage duration risk without affecting the yield curve. The borrowing mix indicates prudent debt management and a steady outlook for money-market conditions, with a gradual easing bias rather than an aggressive shift in interest rates.
The SBP recently reduced its benchmark interest rate by 50 basis points to 10.5%. This marks a total decrease of 1,150 basis points since the rate peaked at 22% in June 2024.
Pakistan recorded a fiscal surplus of 1.6% of GDP, or Rs2.1 trillion, for the July-September FY26 period, slightly down from 1.7% during the same period last year. The surplus was primarily driven by substantial profits of Rs2.42 trillion from the central bank, which benefited from record-high positions in open market operations.
