The federal government raised some Rs 3.4 billion through the auction for long-term government bonds. The auction for the sale of 3-, 5-, 10- and 20-year Pakistan Investment Bonds (PIBs) was held on June 12, 2018 and overall, the State Bank of Pakistan (SBP) received bids worth Rs 9.179 billion (total realized value) for the sale of 3-, 5- and 10-year bonds. However, no bid was received for 20-year bonds.
Overall, the federal government has accepted bids worth Rs 3.38 billion with a realized value of Rs 3.473 billion against the target of Rs 50 billion set by the federal government for this auction. Following the increase in key policy rate by the State Bank, the cut-off yield of all long-term bonds rose slightly. A cut-off yield of 7.5000 percent, up 30 basis points, was set for 3-year PIBs and the government borrowed some Rs 2.6 billion. An amount of Rs 253.336 million was raised from the 5-year long-term investment bond at a cut-off yield of 8.4795 percent up from 8.0308 percent. Similarly, with an increase of 21 basis points, a cut-off yield of 8.6999 percent was set for 10-year PIB with an amount of Rs 619.63 million. The next auction for the borrowing of Rs 50 billion will be held on July 11, 2018.