​Pakistan central bank raises PKR 979B through T-bills auction

Pakistan’s central bank raised PKR 979 billion through the auction of treasury bills or T-bills on Wednesday.

According to the State Bank of Pakistan (SBP), the borrowing was PKR 129 billion more than the targeted amount of PKR 850 billion.

The yields for all four tenors — one-month and three-month, six-month and 12-month — fell by around 0.3 basis points (bps).

The yields for one-month T-Bills fell by 0.29 bps from 10.49% to 10.20%, three-month by 0.34 bps from 10.49% to 10.15%, six-month by 0.32 bps from 10.48% to 10.16% and 12-month by 0.33 bps from 10.49% to 10.16%.

The largest amount of PKR 761 billion was raised via the 12-month bill, followed by PKR 87 billion via the one-month tenor T-bills. The targets were PKR 250 billion and PKR 150 billion, respectively. The government raised PKR 80 billion and PKR 52 billion via the three-month and six-month T-bills, respectively.

During the previous auction on December 24, the SBP raised PKR Rs913.14 billion against the targeted amount of PKR 1.2 trillion.

The SBP has planned to raise PKR 3.25 trillion through six auctions from January to March. The maturing debt during this period is PKR 3,59 trillion.

What are T-bills and PIBs?

The Pakistan government raises money from local and foreign investors through debt instruments. T-bills are one of those instruments backed by the government. Other such instruments are Pakistan Investment Bonds (PIBs), National Savings instruments, Eurobonds, International Sukuk, etc.

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

PIBs are debt securities issued by the State Bank of Pakistan. These bonds are issued in denominations of multiples of PKR 100,000 and available in tenors of 3, 5, 10, and 20 years. The yield on these bonds is fixed and disbursed semi-annually.