KARACHI: The federal government on Wednesday raised Rs 491 billion through the auction of short-term government securities, surpassing its target by Rs 91 billion to address pressing financial needs.
The State Bank of Pakistan (SBP) on Wednesday conducted the auction for the sale of 01-month, 03-month, 06-month and 12-month Government of Pakistan Market Treasury Bills (MTBs) through Primary Dealers with settlement date of September 04, 2025.
Overall, bids totalling Rs 1.414 trillion (realized value) were received for the sale of Market Treasury Bills (MTBs). The majority of bids, amounting to Rs 574.864 billion, were submitted for 1-Month T-bills. With interest rates gradually declining and expected to ease further in the coming months, banks are opting to lock in liquidity for one year at higher rates, resulting in bids of Rs 368.207 billion for 12-month MTBs. Meanwhile, the 3-month and 6-month MTBs attracted bids of Rs 310.111 billion and Rs 161.126 billion, respectively.
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Out of the total bids received, the SBP, on behalf of the federal government, accepted bids worth Rs 491 billion, comprising Rs 382.99 billion in competitive bids and Rs 108.117 billion in non-competitive bids. The borrowed amount is some Rs 91 billion higher than the target of Rs 400 billion set of this auction.
The government secured Rs 125.632 billion through 1-month MTBs and Rs 171.66 billion via 3-month T-bills. Additionally, Rs 43.58 billion was raised from 6-month MTBs, while Rs 150.22 billion was obtained through the sale of 12-month MTBs.
In addition, the SBP also conducted an auction for long-term investment bonds on Wednesday, raising Rs 36.774 billion. The auction for 10-Year Pakistan Investment Bonds (PIB)-Floating Rate (Semi-Annual) attracted total bids of Rs 444 billion. Of these, Rs 36.774 billion was accepted, comprising Rs 28 billion in competitive bids and Rs 8.744 billion in non-competitive bids.
In its recent monetary policy statement, the SBP noted that the federal government’s revised estimates indicate an improved fiscal position for FY25, with both the primary and overall fiscal balances (as a percentage of GDP) exceeding their respective targets and for FY26, the federal government is aiming for further fiscal consolidation, with a primary surplus target of 2.4 percent of GDP.
Copyright Business Recorder, 2025
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