The government raised Rs. 376 billion through a fixed-rate Pakistan Investment Bonds (PIBs) auction on Thursday, compared to a target of Rs. 100 billion.
According to central bank statistics, the cut-off rates for all maturities increased by 120-145 basis points (bps) during the paper auction.
The three-year PIB cut-off yield increased by 145 basis points to 13.3 percent. It increased by 120 basis points to 13.0 percent for the five-year paper and 141 basis points to 13.2 percent for the ten-year paper.
Surprisingly, the SBP received offers totaling Rs. 716.5 billion versus a target of Rs. 100 billion. The three-year PIB sold for Rs. 26.9 billion, the five-year paper for Rs. 62.8 billion, and the 10-year paper for Rs. 286.2 billion, for a total of Rs. 375.8 billion in profits.
Furthermore, it got bids totalling Rs. 122.1 billion for 3-year PIBs, Rs. 241.9 billion for 5-year PIBs, and Rs. 352.6 billion for 10-year PIBs.
The central bank, on the other hand, received no proposals or bids for the 15-, 20-, and 30-year notes, which had a combined auction objective of Rs. 25 billion.
The central bank recently raised the policy rate by 250 basis points to 12.25 percent, signalling that borrowing rates would remain high for the time being, citing risks to external stability due to volatile oil prices, high inflation forecasts, and the global impact of Russia’s war on Ukraine as the main reasons.
