The federal government raised Rs. 466 billion through Pakistan Investment Bonds (PIBs) in an auction held by the State Bank of Pakistan (SBP) on Thursday, successfully surpassing its financing target despite a significant jump in borrowing costs.
The auction attracted robust investor participation, with total bids reaching Rs. 818 billion, more than double the targeted amount. The strong response highlighted sustained demand for government securities even as yields moved higher amid evolving economic and monetary policy expectations.
Most bids were accepted at cut-off levels across selected maturities, reflecting investors’ preference for higher-return sovereign instruments during a period of macroeconomic uncertainty.
Auction Breakdown
- 2-Year PIB:
- Cut-off yield: 12.50% (up 216 basis points from 10.33%)
- Secondary market yield: 11.68% (up 82 bps)
- Amount accepted: Rs. 42 billion
- 3-Year PIB:
- Cut-off yield: 12.50% (up 225 bps from 10.24%)
- Secondary market yield: 11.61% (up 89 bps)
- Amount accepted: Rs. 66 billion
- 5-Year PIB:
- Cut-off yield: 12.50% (up 175 bps)
- Secondary market yield: 12.26% (up 24 bps)
- Amount accepted: Rs. 34 billion
- 10-Year PIB:
- No bids accepted
- 15-Year PIB:
- Cut-off yield: 12.40% (up 90 bps)
- Weighted average yield: 12.77%
- Secondary market yield: 12.68% (down 37 bps)
- Amount accepted: Rs. 325 billion
The government mobilized Rs. 453 billion through competitive bids and an additional Rs. 13 billion via non-competitive bids, bringing the total amount raised to Rs. 466 billion.
The sharp increase in yields signals investors’ demand for higher returns amid inflation risks, liquidity dynamics, and uncertainty surrounding the future direction of monetary policy. The strong participation, particularly in longer-term bonds, indicates continued market confidence in government debt despite rising financing costs.
