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SBP raises PKR 882.6 billion through T-Bills and PIBs amid stable yields

Government strategically manages debt, reduces rollover risk in H1 FY25

SBP raises PKR 882.6 billion through T-Bills and PIBs amid stable yields
Treasury Bills
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The State Bank of Pakistan (SBP) announced it raised PKR 882.6 billion ($3.1 billion) through Treasury Bills (T-Bills) and Pakistan Investment Bonds (PIBs). While yields on T-Bills remained largely unchanged, the one-month yield dropped by 17 basis points to 12.149%.

In the T-Bill auction, the government attracted PKR 1,505 billion in participation, raising PKR 562 billion against a target of PKR 400 billion and a maturity of PKR 698 billion. Yields on three-month, six-month, and 12-month papers held steady at 12.01%, 11.99%, and 12.01%, respectively.

The floaters PIB auction saw the government raise PKR 321 billion, surpassing its target of PKR 150 billion, with participation reaching PKR 1,537 billion.

According to SBP's semi-annual report, interest payments on domestic debt during the first half of FY25 were primarily tied to PIBs and T-Bills due to higher stock and interest rates.

For the first time since FY19, the government made a net retirement of PKR 1,327 billion to scheduled banks. Unlike FY19, when the government borrowed from SBP to repay scheduled banks, a lower fiscal deficit and substantial SBP profit transfers enabled these repayments in FY25.

The government adopted strategies to benefit from declining interest rates and mitigate rollover risks. It set higher auction targets for PFLs and fixed-rate PIBs while planning net retirements in T-Bills.

SBP highlighted that these measures in H1 FY25 effectively extended debt maturities, reduced rollover and currency risks, diversified the investor base by engaging non-bank participants, and lowered interest costs.

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