Pakistan government raises PKR 690 billion through treasury bills and bonds sale

The State Bank of Pakistan (SBP) successfully raised a total of PKR 690 billion ($2.43 billion) on Wednesday through the sale of treasury bills and investment bonds.

In the latest T-bill auction, the SBP raised PKR 259 billion ($0.9 billion) with yields surging by up to 17 basis points. Participation was strong, with bids totaling PKR 737 billion.

The government achieved this despite the initial target of PKR 350 billion and the maturity of PKR 371 billion. Current yields for the T-bills are set at 11.83% for the 3-month, 11.67% for the 6-month, and 11.65% for the 12-month papers.

Additionally, the government secured PKR 431.3 billion through the Pakistan Investment Bond (PIB) auction, featuring floater rates. This included PKR 25.8 billion from the 2-year papers and PKR 405.5 billion from the 10-year PIBs.

Analysts suggest that substantial interest rate cuts may help alleviate debt-servicing costs. The government's recent T-bill buyback program, funded by SBP profits, is also expected to reduce debt levels.

These measures are projected to lower debt servicing to approximately PKR 7.8 trillion, 4.1% lower year-over-year compared to FY24's PKR 8.2 trillion, and well below the budgeted PKR 9.8 trillion for FY25.