Karachi, October 10, 2023 – Pakistan has unveiled plans to raise a substantial amount of Rs 7.90 trillion through the sale of Market Treasury Bills (MTBs) over the next three months, according to an announcement made on Tuesday.
The State Bank of Pakistan (SBP) has issued an auction calendar specifying the fundraising target to be achieved by December 31, 2023. Remarkably, the targeted amount is intended to cover the repayment of securities worth Rs 8.95 trillion that are set to mature during this period.
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In the series of scheduled auctions, the first auction took place on October 4, 2023, during which Pakistan successfully raised Rs 557 billion against the initial target of Rs 600 billion.
The cut-off yields in the most recent auction were as follows:
3-month T-bills: 22.5002 percent
6-month T-bills: 22.8500 percent
12-month T-bills: 22.84 percent
The prevailing benchmark interest rate currently stands at 22 percent.
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According to the announced schedule, the SBP will conduct a total of seven auctions between October 4 and December 27.
Treasury bills are commonly used by countries to secure loans from financial institutions to meet budget financing requirements. However, over recent years, Pakistan’s debt obtained through treasury bills has increased significantly.
In addition to the MTBs, the SBP also plans to conduct auctions of Pakistan Investment Bonds (PIBs) during the same period, aiming to raise funds amounting to Rs 480 billion.
This ambitious move by Pakistan to raise funds through the issuance of treasury bills is a part of the country’s ongoing efforts to manage its domestic debt and meet its financial obligations. It will be closely watched by financial analysts and investors to assess its impact on the country’s fiscal health and economic stability.
