Money and banking drive economic activity by facilitating transactions, savings, and investments. Banks manage financial resources, offer credit, and regulate money supply, ensuring stability and growth in Pakistan’s financial sector.
Karachi, April 30, 2025 – The State Bank of Pakistan (SBP) has revealed that increased taxation on property transactions has significantly impacted housing finance, dampening the demand for home-building loans despite a reduction in borrowing costs.
(more…)
Karachi, April 29, 2025 – The Pakistan rupee registered a slight improvement against the US dollar on Tuesday, appreciating by 5 paisas in the interbank foreign exchange market.
(more…)
KARACHI, April 29, 2025 — The State Bank of Pakistan (SBP) has officially announced a public holiday on Thursday, May 1, 2025, in observance of Labor Day.
(more…)KARACHI, April 29, 2025 – The State Bank of Pakistan (SBP) is widely expected to lower its benchmark policy rate by 50 basis points, bringing it down to 11.5% during its next monetary policy announcement scheduled for May 5.
(more…)
Karachi, April 28, 2025 — The State Bank of Pakistan (SBP) has emphasized the urgent need to refine tax policy to avoid unintended consequences that fuel higher cash circulation (CiC) in the economy.
(more…)Karachi, April 28, 2025 – The State Bank of Pakistan (SBP) has reported that the federal government managed to save approximately Rs30 billion through successful buyback auctions of Market Treasury Bills (MTBs) during the first half of the fiscal year 2025.
In its half-yearly economic report, the SBP highlighted that the strategic use of buyback auctions allowed the government to lower its debt servicing costs significantly. “The estimates suggest the government saved a total of around Rs30 billion in debt servicing with these operations,” the SBP stated.
Understanding the Buyback Auctions
Buyback auctions involve the government repurchasing its own debt instruments, such as MTBs, from the secondary market before their maturity. The primary goals are to smooth the debt redemption profile, reduce refinancing risks, and potentially save on interest expenses if market conditions are favorable. While buyback mechanisms are common in developed economies, they are less frequently employed in developing countries due to liquidity constraints.
The motivation behind Pakistan’s decision to hold buyback auctions was fueled by improved fiscal liquidity, largely following a substantial profit transfer from the SBP in September 2024. This liquidity allowed the government to repurchase older MTBs issued at higher interest rates while simultaneously raising longer-term debt at lower rates amid a falling interest rate environment.
Details of the Recent Buyback Auctions
The government repurchased four issues of MTBs, maturing in December 2024, amounting to approximately Rs3.6 trillion at average yields exceeding 20%. These operations not only lowered immediate debt costs but also significantly mitigated rollover risk.
The buybacks were executed through special auctions, where specific securities and target amounts were announced for competitive bidding. Due to declining interest rates, the auctions were oversubscribed, and the government successfully bought back a total of Rs1.026 trillion—split between Rs566 billion in 6-month MTBs and Rs460 billion in 12-month MTBs.
However, acceptance rates varied: around 73% of targets were met for the 6-month tenor, while only 34% were accepted for the 12-month tenor. This discrepancy reflected higher pricing expectations from market participants in subsequent auctions.
Overall, the SBP noted that the buyback auctions accounted for 27% of the maturing MTBs, thereby easing the government’s future borrowing needs. Nevertheless, the SBP cautioned that frequent buybacks, if not carefully managed, could distort market signals, fuel inflationary expectations, and increase long-term borrowing costs. Effective communication of buyback objectives is crucial to avoid these risks.
Karachi, April 28, 2025 – National Bank of Pakistan (NBP) provided a comprehensive update to its shareholders on Monday regarding the bank’s financial position as of March 31, 2025.
(more…)Karachi, April 28, 2025 – The Pakistani rupee weakened by 10 paisas against the US dollar on Monday, closing at PKR 281.07 compared to last Friday’s PKR 280.97 in the interbank foreign exchange market.
(more…)Karachi, April 27, 2025 – The Pakistani rupee is anticipated to face notable fluctuation in the interbank foreign exchange market during the upcoming week, influenced by the evolving geopolitical landscape and global trade uncertainties.
(more…)
Governor of the State Bank of Pakistan (SBP), Jameel Ahmad, reiterated Pakistan’s strengthening macroeconomic stability and improving outlook during a series of high-profile meetings with executives from top global financial and investment institutions such as JP Morgan, Standard Chartered, Deutsche Bank, Jefferies, and major credit rating agencies. These discussions took place on the sidelines of the IMF–World Bank (WB) Spring Meetings in Washington, D.C.
(more…)