Pakistan sets over PKR 5 trillion borrowing target via debt auctions

Pakistan has set borrowing targets of more than PKR 5 trillion through auctions of short- and long-term government securities, the State Bank of Pakistan said on Tuesday, as authorities seek to manage refinancing needs amid large maturities.

According to auction targets released by the central bank, the government aims to raise PKR 3,350 billion through the sale of short-term treasury bills, against a maturing amount of PKR 3,842 billion. Of the total maturities, PKR 1,022 billion are held by provincial governments, the SBP said.

For long-term debt, the SBP has set a target of PKR 1,350 billion for fixed-rate Pakistan Investment Bonds (PIBs), while floating-rate PIBs have an auction target of PKR 400 billion.

Analysts said the auction targets indicate continued reliance on domestic borrowing to meet fiscal financing needs, with a particular focus on short-term instruments due to sizeable rollovers.

“The higher treasury bill target relative to PIBs suggests the government may continue to favor shorter-tenor borrowing, especially given large near-term maturities,” one market analyst said.

The SBP conducts regular auctions of government securities to finance the budget deficit and manage liquidity in the banking system. Market participants will closely watch cut-off yields in the upcoming auctions for signals on interest rate expectations and demand conditions.