Karachi, July 7, 2023 – In a bid to meet its budgetary requirements, Pakistan has announced plans to raise Rs9.9 trillion through the auction of securities over the next three months.
(more…)Tag: Pakistan Investment Bonds
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SLR limits not to apply on floating rate PIBs: SBP
KARACHI: The State Bank of Pakistan (SBP) has notified regulations to Statutory Liquidity Requirement (SLR) eligibility limit on floating rate Pakistan Investment Bonds (PIBs).
In a circular issued on Friday, the SBP said it is decided that SLR eligibility limit of 15 percent for banks and 5 percent for Development Finance Institutions (DFIs) on Pakistan Investment Bonds (PIBs) shall not be applicable on floating rate PIBs.
The SBP said that it had issued circulars on March 08, 2018 and May 22, 2004 for banks and Development Finance Institutions (DFIs) respectively.
All other instructions on the subject will remain same. The above instructions will be effective immediately, the SBP said.
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Floating rate of PIBs to be auctioned: SBP
KARACHI: State Bank of Pakistan (SBP) on Tuesday announced that floating rate of Pakistan Investment Bonds (PIBs) will be auctioned.
The central bank sand that it had issued detailed guidelines on May 07, 2018 through a notification under which details of Floating Rate PIBs have been specified.
Government of Pakistan (GOP) has decided that Floating Rate PIBs may also be auctioned as re-opening of previously issued Floating Rate PIBs.
The re-opening auction mechanism of Floating Rate PIBs will be as under:
Re-opening auctions of Floating Rate PIBs will be conducted through uniform price competitive bidding auction process.
PDs will submit competitive bids in terms of price (up to four decimal points).
The cut-off price, at which GOP decides to accept bids, in the re-opening auction will apply uniformly to all accepted bids.
Coupon rate on Floating Rate PIBs offered in re-opening auctions will be the same as determined in the first auction of respective issue of the bond and reset at the start of each coupon period, in accordance with instructions issued vide DMMD Circular no 16 of 2019.
The successful bidders will make the settlement on settlement date at the amount calculated as per accepted price plus accrued interest for the number of days lapsed since start of the coupon period based on respective coupon rate.
All other auction rules and procedures will remain the same.
All other instructions on the subject will remain unchanged.
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Government to borrow Rs6,300 billion through auction of Market Treasury Bills in first quarter
KARACHI: The government likely to borrow an amount of Rs6,300 billion from commercial banks through auction of market treasury bills (MTBs) during first quarter (July – September) of current fiscal year.
According to auction target for MTBs issued by State Bank of Pakistan (SBP), the amount would be raised through seven auctions during the period.
The government borrows from commercial banks through sale of commercial papers for budget financing.
The details of auctions showed the government would borrow primarily to repay the matured amount. The details further showed that out of Rs6,300 billion, an amount of Rs5,065 billion would be spent on repayment against matured amount.
The remaining amount of Rs1,234.55 billion would be utilized for budget financing.
Banking analysts said that the government had decided to change the borrowing pattern. During the past fiscal year most of the borrowings were made through central bank. However, the government under IMF loan program agreed not to borrow from the SBP.
The auction target showed that an amount of Rs300 billion would be raised through sale of Pakistan Investment Bonds (PIBs) of fixed rates.
While, an amount of Rs400 billion would be raised through sale of PIB (floating rates).
Analysts said that the banks were taking more interest in government maturities due to frequent increase in policy rate by the SBP. The banking sector is anticipating more hike in interest rate by the SBP during remaining months of current year.