SBP raises Rs145bn through PIBs auction, yields soar by up to 27bps

July 14, 2022 (MLN): The State Bank of Pakistan (SBP) raised Rs145 billion on Thursday, against the target of Rs150 billion by selling fixed-rate Pakistan Investment Bonds (PIBs).

The cut-off yield for 3-year PIBs increased by 3bps to 14%, while the cut-off yield for 5-year PIBs jumped by 27bps to 13.45%.

Against the auction target of Rs150 billion, SBP received total bids of Rs725 billion.

SBP received bids worth Rs149.67 billion for 3-year, Rs288.14 billion for 5-year, Rs281.58 billion for 10-year, and Rs5.7 billion for 15-year PIBs. However, no bids were received for 20-year and 30-year bonds.

The SBP accepted Rs7 billion for 3-year papers and Rs125.89 billion for 5-year papers. While the central bank rejected the bids for the 10-year and 15-year bonds.

To recall, yesterday the government raised Rs506 billion against the sale of short-term security papers. This was the first auction after the monetary policy was announced on July 7, in which the central bank raised the policy rate by 125bps to 15%.

Following the rise in the policy rate, the six-month Karachi Interbank Offered Rate (KIBOR) increased to its all-time high level of 15.87%, up by 35 basis points (bps) DoD on Thursday. Accordingly, the spread between the policy rate and KIBOR stood at 87 bps.

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