Pakistan’s central bank raised PKR 749 billion through the auction of treasury bills or T-bills on Wednesday.
According to the State Bank of Pakistan (SBP), the borrowing was PKR 99 billion more than the targeted amount of PKR 650 billion.
The yields for all four tenors — one-month and three-month, six-month and 12-month — fell by around 0.1 basis points (bps).
The yields for one-month T-Bills fell by 0.1 bps from 10.99% to 10.89%, three-month by 0.04 bps from 11.04% to 11%, six-month by 0.05 bps from 11.05% to 11% and 12-month by 0.08 bps from 11.35% to 11.27%.
The largest amount of PKR 368 billion was raised via the 12-month bill, followed by PKR 251 billion via the three-month tenor T-bills — both exceeding the borrowing targets. The government only raised PKR 61 billion and PKR 69 billion via the one-month and six-month T-bills, respectively.
During the previous auction on November 12, the SBP raised PKR 478 billion against the targeted amount of PKR 550 billion.
The SBP had planned to raise PKR 4.82 trillion to meet fiscal financing needs and refinance maturing debt from September to November.
According to the Domestic Markets & Monetary Management Department, the central bank plans to generate PKR 2.87 trillion through seven T-Bills auctions by November 26. The auctions are intended to refinance PKR 4.01 trillion in maturing short-term debt.
What are T-bills and PIBs?
The Pakistan government raises money from local and foreign investors through debt instruments. T-bills are one of those instruments backed by the government. Other such instruments are Pakistan Investment Bonds (PIBs), National Savings instruments, Eurobonds, International Sukuk, etc.
T-Bills are short-term, highly liquid government securities issued in 3, 6, and 12-month tenors. The State Bank of Pakistan auctions T-bills every fortnight (on Wednesdays).
PIBs are debt securities issued by the State Bank of Pakistan. These bonds are issued in denominations of multiples of PKR 100,000 and available in tenors of 3, 5, 10, and 20 years. The yield on these bonds is fixed and disbursed semi-annually.
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