The government successfully raised Rs342 billion in the auction of fixed-rate Pakistan Investment Bonds (PIBs), surpassing its initial target of Rs300 billion.
The auction results showed a decrease in the cut-off yields for various tenors of PIBs, with the yields falling by 30 to 54 basis points (bps).
The two-year PIBs saw the largest drop in yield, which decreased by 54bps, reaching 10.848%. Similarly, the three-year bonds saw a 35bps drop to 11.05%, while the five-year PIBs yielded 11.39%, down by 31bps. The 10-year bonds saw a decrease of 30bps, with the yield settling at 12.2%.Â
However, the bids for the 15-year PIBs were rejected.
The recent decline in yields reflects the broader trend in the country’s economic conditions. Over the past year, the SBP has cut its key interest rate from a high of 22% to 11%, in line with the reduction in inflation from 38% in May 2023 to 3.2% in June 2025.
The successful auction and decline in yields suggest that the bond market is responding positively to the government’s fiscal policies and the ongoing reduction in interest rates. This development is expected to provide a boost to investor confidence, especially in the context of ongoing economic reforms.
