The federal government has unveiled its borrowing strategy for the second quarter (October to December) of fiscal year 2024, aiming to secure more than Rs10 trillion from the domestic market to meet its financial obligations and bridge the fiscal gap.
As per reports, the State Bank of Pakistan (SBP) issued an auction calendar on behalf of the federal government. The government’s borrowing plan includes the auction of various types of security papers, encompassing Pakistan Investment Bonds Fixed Rate (PIBs Fixed Rate), Pakistan Investment Bonds (PIBs) Floating Rate, and Government of Pakistan Market Treasury Bills (MTBs).
The government’s primary focus will be on short-term government papers, as it strives to raise a significant portion of the borrowed amount through the sale of Market Treasury Bills (MTBs). Approximately Rs7.905 trillion will be raised through MTBs during this period, which is lower by Rs2 trillion compared to the maturing amount for the same quarter.
To achieve its financing target, the government has scheduled seven auctions of Treasury Bills (T-Bills) during the quarter. The borrowing breakdown for the quarter includes Rs1.5 trillion in October 2023, Rs3.825 trillion in November 2023 through three T-Bill auctions, and Rs2.580 trillion in December 2023.
In addition to MTBs, the federal government intends to borrow Rs2.76 trillion through the sale of long-term Pakistan Investment Bonds (PIBs) during the second quarter of FY24. This includes various PIB categories, such as Fixed Rate, Floating Rate Semi-Annual Auction, and 2-year and 3-year PIBs with a Floating Rate.
The cumulative borrowing target for the October-December 2023 period stands at Rs10.665 trillion, as the government aims to secure funds through a mix of short-term and long-term security papers. These funds are essential to bridge the fiscal gap and support the government’s ongoing operations and fiscal commitments.
We were born as borrowers, we survive as borrowers, we shall dies as borrowers. This is our legacy and this our fate. We know this very well but we shall not correct ourselves. Certainly not.