Qudsia Bano

The Government of Pakistan raised more than Rs1.42 trillion through the sale of Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs) in auctions conducted by the State Bank of Pakistan (SBP) on August 20. According to official auction results available with WealthPK, the government secured Rs1.31 trillion from T-bills of varying maturities, while Rs109.25 billion was mobilized through the issuance of 10-year floating-rate PIBs.

Analysts say the outcome underscores the government’s continued reliance on domestic debt markets to finance fiscal needs amid limited external inflows. In the T-bills auction, Rs500.75 billion was raised through 1-month papers, Rs192.56 billion from 3-month, Rs119.18 billion from 6-month, and Rs501.25 billion from 12-month papers. The total realized amount stood at Rs1,313.76 billion against a face value of Rs1,384.77 billion.

Cut-off yields remained broadly stable, reflecting market expectations for a steady monetary policy stance. The 1-month cut-off yield was set at 10.8996 percent, the 3-month and 6-month tenors were both settled at 10.850 percent, while the 12-month cut-off came at 10.9599 percent. Weighted average yields across maturities were marginally lower. Non-competitive bids worth Rs108.42 billion were also accepted, with the highest participation of Rs50.77 billion in 6-month papers. Including non-competitive bids, a total of Rs491.64 billion was accepted in the T-bills auction.

Alongside, the SBP also conducted an auction for 10-year Pakistan Investment Bonds (Floating Rate, semi-annual). Bids amounting to Rs873.8 billion were received in a price range of 95.5244 to 93.4837. Out of this, the government accepted Rs100 billion in competitive bids at a cut-off price of 95.5244, translating into a realized amount of Rs95.52 billion. With accrued interest of Rs1.24 billion, the total realized value reached Rs96.77 billion. Additionally, non-competitive bids worth Rs9.25 billion were accepted, taking the aggregate to Rs109.25 billion.

The combined acceptance of over Rs1.42 trillion reflects robust investor appetite for both short-term and long-term government securities. While T-bills attracted strong demand across all maturities, the PIB auction reflected a measured yet steady interest in long-term bonds despite persistent economic challenges.

With inflation moderating and monetary policy signals steady, yields are expected to remain stable in the near term. However, the government’s rising dependence on domestic borrowing highlights the urgency of fiscal discipline and deeper structural reforms to ease financing pressures.

Credit: INP-WealthPk