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Government aims to shift debt profile to longer term Bonds as it sets auction target of Rs.2.445 trillion for next three months

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June 16, 2020 (MLN): The Government of Pakistan intends to raise Rs.2.445 Trillion through the auction of debt securities during June – August 2020.

According to a schedule issued by the State Bank of Pakistan (SBP), it will be auctioning Market Treasury Bills (MTB), Fixed and Floating Rate Pakistan Investment Bonds (PIB) and Variable Rental Rate GOP Ijara Sukuks (GIS) to raise the required amount.

Furthermore, the amount maturing during the period is Rs.2.048 trillion showing an additional funding requirement of Rs.396.50 billion by the government.

The most notable development in the auction schedule is that the target for the MTB has been revised down to Rs.900 Billion, compared to Rs.2.275 trillion as published in the May – July schedule, with the government aiming to move the debt to longer term floating rate instruments.

To that end, the government plans to introduce 3 and 5 year floating rate PIBs (PIBFRR) alongside the existing 10 year instrument with the auction target for these being set at Rs. 900 billion.

To further streamline this, the SBP will be conducting auction of PIBFRRs on the same day as MTB auctions.

The fixed rate PIBs are expected to raise Rs.420 million while the Govt. aims to raise a further Rs.225 billion from GOP Ijara Sukuks.

During the period debt worth Rs.2.048 trillion is set to mature out of which Rs.1.876 trillion is in MTBs, Rs.101.40 billion is in Fixed rate PIBs and Rs.71 billion is in GOP Ijara Sukuk.

 

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Posted on: 2020-06-16T18:55:00+05:00

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