KARACHI: The federal government plans to raise around Rs 5 trillion from the domestic banking sector during the January-March 2026 quarter through the sale of government securities to finance the fiscal deficit, underscoring its continued reliance on local banks to meet funding requirements.
The State Bank of Pakistan (SBP) on Friday issued calendars for the auction of Pakistan Investment Bonds (PIBs) and Government of Pakistan Market Treasury Bills (MTBs) for the third quarter of this fiscal year.
Analysts said that in the absence of sufficient external financing, the federal government intends to meet most of its funding needs through domestic sources, with the bulk of borrowing planned through the sale of short-term government securities, particularly MTBs.
According to the auction calendar issued by the SBP, the federal government plans to raise around Rs 3.25 trillion through the sale of Treasury Bills during January to March of the current fiscal year, against maturities of Rs 3.589 trillion falling due in the same period.
In addition, about Rs 1.65 trillion is expected to be borrowed through PIBs, including Rs 1.35 trillion via fixed-rate PIBs and Rs 300 billion through semi-annual floating-rate PIB auctions.
Overall, six MTB auctions, or two each month, are scheduled during the quarter to help finance the fiscal deficit. Of the total, around Rs 1.55 trillion is set to be raised through two MTB auctions in January 2025, followed by Rs 950 billion in February 2025 and Rs 750 billion in March 2025 through two auctions each month.
Auctions for fixed-rate PIBs are scheduled for January 1, February 6, and March 11, 2026, with a targeted borrowing of Rs 450 billion at each auction. In addition, six auctions of floating-rate PIBs, each with a target size of Rs 50 billion, will be conducted during the quarter to meet an overall borrowing target of Rs 300 billion. Cumulatively, an amount of Rs 4.9 trillion will be mobilized during this quarter.
With cut in the key policy rate, interest payments are expected to remain lower than the budgeted amount for the full year, which may help the government to contain the fiscal deficit and less borrowing.
According to SBP, the Federal Board of Revenue (FBR) collection has slowed down considerably to 10.2 percent YoY during July-November FY26, implying significant acceleration required to achieve the budgeted tax collection target in the remaining seven months of FY26.
The SBP’s monetary policy committee in its recent meeting also underscored the importance of structural reforms, especially to broaden the tax base and privatization of loss making SOEs, to strengthen fiscal buffers while creating space for public investment and needed spending for socioeconomic uplift.
Copyright Business Recorder, 2026
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