Pakistan central bank raises PKR 370B via T-bills auction, lower than target

The State Bank of Pakistan (SBP) raised PKR 370 billion in Wednesday’s treasury bills (T-bills) auction, falling short of its PKR 400 billion target despite receiving bids totaling PKR 1.6 trillion.

Yields moved in a mixed direction across tenors, with declines seen in short-term instruments and a notable increase in the 12-month bills.

The auction was held against a maturing amount of PKR 544 billion.

The one-month yield rose five basis points to 10.899%, while the three-month and six-month tenors saw increase of 15 bps and 17 bps, settling at 10.85% and 10.874%, respectively.

The 12-month T-bill yield posted the steepest rise, up 30 bps to 10.99%.

The central bank earlier released its auction calendar for T-bills and Pakistan Investment Bonds (PIBs) for the August-October period, targeting PKR 6.1 trillion to meet fiscal financing needs and refinance maturing debt.

According to the SBP, seven T-bill auctions will be held between August 6 and October 29, aiming to raise PKR 3.675 trillion. These auctions are intended to refinance PKR 3.818 trillion in short-term maturities.

The breakdown includes PKR 1.25 trillion in 12-month bills, PKR 925 billion each in six-month and three-month tenors, and PKR 575 billion in one-month bills.

In parallel, three fixed-rate PIB auctions are scheduled for August 1, September 4, and October 14, with a target of PKR 1.1 trillion. These bonds will be offered in maturities ranging from two to 15 years, with coupon rates between zero and 11.5%.

Additionally, seven floating-rate PIB auctions will be conducted during the same period, targeting PKR 1.4 trillion. All floating-rate bonds will carry a 10-year tenor and a semi-annual coupon rate of 10.8974%. Auction sizes will range from PKR 150 billion to PKR 250 billion.

The calendar aligns with the government’s debt management strategy, as PKR 1.237 trillion in principal-only maturities are due during the three-month window. The auctions are expected to support fiscal operations while offering investment opportunities for institutional investors.