May 29, 2019 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Wednesday in which it sold PIB’s worth Rs.141.18 Billion in Fixed and Floating rate instruments.
Earlier the SBP had received bids worth Rs.465.110 Billion for the Fixed Rate bonds of 3, 5 and 10 year maturities while no bids were made for the 20 year PIB. The auction target for Fixed Rate PIB's was Rs.100 Billion against a maturing amount of Rs.1.959 Billion.
The SBP also received bids worth Rs.68.50 Billion for the 10 year floating rate bond, with spread ranging between 70 – 150 bps over the benchmark against the target of Rs.100 Billion
Out of the Bids the SBP accepted Rs.121.181 Billion for the fixed Rate PIB’s while it accepted Rs.20 Billion for the Floating Rate PIB at a spread of 70 bps over benchmark.
However due to rising interest rates and the PIB’s selling at a discount, the realized amount from the Fixed Rate auction was Rs.105.592 Billion
The cut off yield for the fixed rate bonds was 13.6999 percent for the 3 year PIB, 13.80 percent for 5 year and 13.60 percent for the 10 year PIB.
After including the non-competitive bids and amount short sold, the total auction amount increased to Rs.157.658 Billion.
