Pakistan raises PKR 491 billion through T-Bills auction

Pakistan has exceeded its borrowing target by raising over PKR 491 billion in the T-Bill auction held on Wednesday, according to the State Bank.

The bidding saw the participation of PKR 1,477 billion at cut-off rates unchanged for all bills other than the 1-month T-Bills.

The government raised PKR 491 billion against its target of PKR 400 billion and maturity of PKR 824 billion.

The yields of 3, 6, and 12-month bills remained unchanged at 10.85%, 10.85% and 10.99%, respectively, as compared to the auction on August 20. The yield for the 1-month T-Bills fell from 10.89% to 10.75%.

The State Bank of Pakistan (SBP) plans to raise a total of PKR 4.82 trillion to meet fiscal financing needs and refinance maturing debt in three months from September to November.

According to the Domestic Markets & Monetary Management Department, the central bank plans to generate PKR 2.87 trillion through seven Market Treasury Bills (MTBs) or T-Bills auctions scheduled between September 3 and November 26. The auctions are intended to refinance PKR 4.01 trillion in maturing short-term debt.

The breakdown of MTB targets shows a strategic tilt toward 12-month bills, which account for PKR 900 billion. Six-month and three-month tenors are expected to raise PKR 750 billion each, while one-month bills will contribute PKR 475 billion.

In parallel, the SBP will conduct three fixed-rate and Pakistan Investment Bonds (PIBs) auctions on September 5, October 14, and November 5, aiming to raise PKR 1.2 trillion. These bonds will be offered in 2-year to 15-year maturities, with coupon rates ranging from zero to 11.5 percent.

Additionally, seven floating-rate PIB auctions are scheduled between September 3 and November 26, targeting PKR 750 billion. All floating-rate bonds carry a 10-year tenor and a semi-annual coupon rate of 10.9 percent. The auction sizes will range from PKR 50 billion to PKR 150 billion.

What are T-Bills?

The Pakistan government raises money from local and foreign investors through debt instruments. T-Bills or MTBs are one of those instruments backed by the government. Other such instruments are PIBs, National savings instruments, Eurobonds, International Sukuk, etc.

MTBs are short-term, highly liquid government securities issued in 3, 6, and 12-month tenors. The State Bank of Pakistan auctions MTBs every fortnight (on Wednesdays).