Govt to raise Rs6.75trn from T-bills, PIBs auction to cover budget deficit, repay debt

The government is set to borrow Rs6.75 trillion from commercial banks between March and May to finance its budget deficit and repay maturing loans. 

According to the State Bank of Pakistan (SBP), the government plans to raise Rs3.65 trillion through Market Treasury Bills (T-bills) with maturities ranging from three to twelve months, and an additional Rs3.1 trillion through fixed and floating-rate Pakistan Investment Bonds (PIBs) with maturities of two to fifteen years.

The total maturity amount for T-bills and PIBs during this three-month period is projected at Rs3.872 trillion. The government continues to rely heavily on borrowing to meet its financial obligations, primarily due to weak tax collection and low financial inflows.

While the International Monetary Fund (IMF) recently completed its first review of Pakistan’s $7 billion bailout program, discussions remain ongoing on certain policy matters, delaying a final staff-level agreement. 

Moody’s global rating agency recently upgraded Pakistan’s banking outlook from stable to positive, citing improved financial performance. 

The report noted that Pakistani banks have significant exposure to government securities, which make up roughly half of the total banking assets. 

While the outlook for the government’s credit strength is improving, challenges remain, including a high level of problem loans and ongoing fiscal vulnerabilities.