Govt plans Rs7.15 trillion borrowing through T-bills, PIBs by August

The federal government plans to raise Rs7.15 trillion through auctions of market Treasury bills and Pakistan Investment Bonds between June and August, according to the State Bank of Pakistan’s latest auction calendar.

The borrowing plan includes Rs6 trillion through Treasury bills, Rs1.05 trillion through fixed-rate Pakistan Investment Bonds, and Rs100 billion through floating-rate bonds.

The proposed borrowing is higher than the Rs4.9 trillion targeted during January-March and Rs6.5 trillion during March-May.

However, most of the Treasury bill targets are intended to refinance maturing debt rather than meet new funding requirements.

The calendar is heavily weighted towards the beginning of the period. The government plans to raise Rs2 trillion in the first auction, settling on June 11, against maturities of Rs1.835 trillion falling due on the same day.

Auction targets are expected to decline to between Rs350 billion and Rs400 billion by August.

The target for fixed-rate Pakistan Investment Bonds has been reduced to Rs1.05 trillion from Rs1.35 trillion maintained during the previous three quarters.

The target for floating-rate bonds has also been cut to Rs100 billion from a range of Rs175 billion to Rs400 billion in earlier periods.