Pakistan raises PKR 1.621 trillion in treasury bills, bonds auction

The Pakistan government raised PKR 1.621 trillion ($5.8 billion) through auctions of treasury bills and investment bonds this week, exceeding its target amid strong investor demand.

The State Bank of Pakistan said Wednesday’s treasury bill auction saw bids totaling PKR 2.7 trillion, with the government raising PKR 1.41 trillion against a target of PKR 1.35 trillion. Maturing bills amounted to PKR 1.58 trillion.

Yields on three-month and six-month treasury bills held steady at 10.99% and 10.89%, respectively, while the 12-month bond yield fell by 13 basis points to 10.927%.

In a separate auction for floating-rate Pakistan Investment Bonds, the government raised PKR 208 billion against a target of PKR 300 billion, with total bids reaching PKR 767 billion.

Earlier this week, the Ministry of Finance outlined plans to raise PKR 5.575 trillion over the next three months through treasury bills and bonds. This includes PKR 2.4 trillion from PIBs — PKR 1 trillion via fixed-rate bonds and PKR 1.4 trillion through floating-rate instruments — along with PKR 3.175 trillion from short-term treasury bill auctions.

The central bank noted improvements in fiscal and primary balances in the 2024-25 fiscal year, driven by higher revenues and controlled spending. However, a shortfall in external financing has increased reliance on domestic borrowing.

For the 2025-26 fiscal year, the government aims for a primary surplus of 2.4% of GDP as part of its fiscal consolidation strategy.

The State Bank said economic growth is expected to pick up in the coming year, supported by earlier interest rate cuts. However, it warned of risks from a widening trade deficit and weak financial inflows, noting that some proposed budget measures could further increase imports.