SATURDAY OCTOBER 01: Government to borrow Rs 1.07 trillion in second quarter

KARACHI: The federal government has planned to borrow some Rs 1.070 trillion through Pakistan Investment Bond and Market Treasury Bills during the second quarter of current fiscal year. The shortfall in revenue and the rising current expenditure have forced the government to borrow more from the domestic banking system and the State Bank on Friday issued two different auction calendars for sale of PIBs and MTBs during October-December 2011-12.
According to the PIBs auction calendar, the federal government has planned to borrow some Rs 45 billion through long term investment bonds. Three targeted amount will be collected through three auctions. First auction will be held on October 12, 2011, second on November 23, 2011 and third auction will be held on December 21, 2011 to achieve the target of Rs 45 billion.
In addition, according to MTBs auction calendar, some Rs 1.025 trillion will be borrowed through T-bills. To get this amount some seven auctions have been mapped out by the SBP. First auction will be held on October 6, 2011 for borrowing Rs 185 billion while Rs 250 billion will be collected in the second auction on October 20.
Rupees 215 billion and Rs 110 billion MTBs will be sold in third and fourth auction to be held on November 3, and November 17, respectively. Rupees 265 billion will be borrowed during December 2011 through three auctions. However, the State Bank has made it clear that any bid can be rejected without assigning any reason.