Karachi, July 8, 2025 – The federal government is set to raise a record Rs5.57 trillion through borrowing via auctions of government securities during the first quarter (July–September) of the fiscal year 2025-26, as part of its ongoing efforts to manage the budget deficit and fund public expenditure.
According to the auction calendar released by the State Bank of Pakistan (SBP), a total of Rs5.57 trillion will be generated through the sale of Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs). This large-scale borrowing strategy reflects the government’s continued reliance on domestic sources to bridge the revenue-expenditure gap.
The plan includes raising approximately Rs3.175 trillion through the auctions of short-term MTBs. A total of six auctions will be conducted for these T-Bills during the quarter, with the first scheduled for July 9, 2025, targeting a hefty Rs1.35 trillion.
Simultaneously, the government aims to raise Rs2.4 trillion through the borrowing of long-term PIBs. This includes Rs1 trillion from PIBs with fixed rates and Rs1.4 trillion from semi-annual floating-rate PIBs. Two auctions for fixed-rate PIBs are scheduled on July 16 and August 1, with each targeting Rs300 billion. A third auction in September is expected to raise Rs400 billion. Additionally, six separate auctions will be held for floating-rate PIBs throughout the quarter to meet the Rs1.4 trillion target.
Economists highlight that sluggish revenue collection continues to push the government towards extensive domestic borrowing. They warn that this aggressive borrowing trajectory has already led to soaring interest payments, which crossed Rs8 trillion in the current fiscal year.
Analysts caution that while such auctions are a necessary tool for liquidity management, they also signal mounting fiscal stress. They suggest the government needs parallel reforms to improve tax revenues and reduce its over-reliance on debt.
With a tight fiscal landscape, the government’s Q1 auction schedule underscores a determined push to secure immediate funds—even at the cost of long-term debt sustainability.