June 18, 2019 (MLN): The State Bank of Pakistan has released the Auction Targets for Pakistan Investment Bonds (PIB)’s and Market Treasury Bills (MTB)’s for June 2019 – August 2019, via official notices today.
As per these notifications, the cumulative auction target for PIB’s at fixed rate for 3, 5, 10 and 20 years is Rs.300 billion, distributed based on fixed coupon rates of 7.25% for 3 year bond, 8% for 5 year bond, 8.75% for 10 year bond and 10.75% for the 20 year bond.
The total maturing amount for the period is Rs.347.34 billion while an additional sum of Rs.47.34 billion will be retired.
Likewise, the auction target for floating rate PIB's is Rs.400 billion. Which, from July 24, 2019 onwards, will also be issued for 3, 5 and 10 years.
It was further mentioned that the coupon rate of PIB (floating) will be benchmark rate plus/minus a margin decided at the auction. “Benchmark rate would be latest 6 month MTB weighted average yield.”
On the other hand, the total auction target for 3 months, 6 months and 12 months MTB is Rs.6.4 trillion composed of a total maturing amount worth Rs.4.95 trillion and additional funding worth Rs.1.45 trillion.
At an official press conference that took place yesterday, Governor SBP Mr. Reza Baqir stated that the government will lay off borrowing from the central bank from July onwards and will shift towards commercial banks instead.
“We have adopted market based policy and SBP will monitor the demand and supply within the economy,” he had said.
