SBP raises Rs506bn in PIB Auction amid cautious demand for longer tenors
MG News | October 15, 2025 at 09:09 AM GMT+05:00
October 15, 2025 (MLN): The State Bank of Pakistan (SBP) raised approximately Rs506 billion through the latest auction of fixed-rate Pakistan Investment Bonds (PIBs), as investor appetite remained strong for longer-tenor instruments, particularly the 10-year and 15-year maturities.
The auction involved a reopening of previously issued bonds rather than a fresh issuance.
The 2-year and 15-year PIBs were offered as zero-coupon instruments, while the 3, 5, and 10-year bonds carried fixed coupon rates of 10.5%, 11%, and 11.5%, respectively.
Auction
Summary
- Total Bids Offered:
Rs1.54 trillion
- Total Bids Accepted (Face Value): Rs506.73 billion
- Cut-off Yields: Mostly inched up for up to 5 years, but came down for 10 and 15 years
The lion’s share of accepted bids
came from the 10-year bond, with the SBP accepting Rs333.4 billion in
competitive bids and an additional Rs4 billion in non-competitive bids, totaling Rs337.4 billion, or two-thirds of the total acceptance.
The 15-year zero-coupon PIB
also attracted significant demand, with Rs125 billion accepted from
competitive bidders and a nominal Rs6 million from non-competitive bids.
In contrast, shorter-tenor bonds saw much smaller uptake.
The 5-year bond, despite offering an 11% coupon, saw only Rs5.9 billion in competitive bids accepted, a mere 2.7% of the Rs220 billion offered.
|
Tenor |
Cut-off
Yield (%) |
Previous
(%) |
Movement |
|
2-Year |
11.3292 |
11.1973 |
▲ 13 bps |
|
3-Year |
11.3493 |
11.1400 |
▲ 21 bps |
|
5-Year |
11.4999 |
11.4395 |
▲ 6 bps |
|
10-Year |
12.0000 |
12.0400 |
▼ 4 bps |
|
15-Year |
12.3400 |
12.3800 |
▼ 4 bps |
Yields rose slightly for bonds with maturities of up to 5 years, while the yields for 10- and 15-year bonds declined modestly, suggesting that investors expect rate stability or a downward shift in the longer term.
Non-competitive bids made up a relatively small share of total accepted amounts, with the largest allocation going to the 5-year bond (Rs6.97 billion), followed by the 2-year (Rs5.47 billion) and 3-year (Rs2.36 billion).
The auction results reflect a clear investor tilt toward longer-term instruments, possibly indicating expectations of interest rate normalization or confidence in long-term macroeconomic stability.
The muted response to shorter tenors suggests cautious sentiment over near-term inflation and monetary policy trends.
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