State Bank of Pakistan raises PKR 1,198 billion through T-Bills and PIBs sales

The State Bank of Pakistan (SBP) raised PKR 1,198 billion ($4.2 billion) through the sale of Treasury Bills (T-Bills) and Pakistan Investment Bonds (PIBs) on Wednesday.

The central bank also conducted a buy-back auction, purchasing floating rate PIBs worth PKR 117 billion.

In the T-Bill auction, participation reached PKR 1,237 billion, with the government raising PKR 569 billion against a target of PKR 700 billion and a maturity of PKR 946 billion.

Yields remained unchanged, standing at 11.82% for the three-month T-Bill, 11.67% for the six-month T-Bill, and 11.64% for the 12-month T-Bill. Additionally, the SBP raised PKR 629.26 billion through the sale of floating rate PIBs.

Pakistan's public debt remained above the legally mandated limit in the last fiscal year, with total liabilities reaching 67.5% of GDP, surpassing the 56.75% threshold set under the Fiscal Responsibility and Debt Limitation (FRDL) Act.

The Debt Policy Statement 2025, released by the Ministry of Finance, attributed the debt increase to high-interest costs, which offset gains from exchange rate stability and expenditure controls.

The finance ministry noted that interest payments reached PKR 8,200 billion in FY24, marking a 43% increase from the previous year due to high policy rates, which peaked at 22%.

The burden of short-term borrowing kept the country reliant on commercial banks, as the Average Time to Maturity (ATM) of domestic debt remained at 2 years and 8 months.