SBP raises Rs131.4bn through PIB auction

June 25, 2024 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Tuesday in which it sold Pakistan Investment Bonds (PIBs) worth Rs131.4 billion for 3,5 and 10 years against a target of Rs190bn.

The offered amount totaled Rs246.67bn for the 3-year, 5-year and 10-year PIBs, while no bids were received for the 15, 20, and 30-year PIBs.

The central bank picked up Rs115bn for 3 years, Rs500 million for 5 years, and Rs13.38bn for 10-year bonds through competitive bids.

In addition to the competitive bids, SBP picked up Rs2.53bn from non-competitive bids, taking the total amount raised to Rs131.4bn.

The cut-off yields stood at 16.6%, 15.45%, and 14.25% for the 3-year, 5-year, and 10-year periods, respectively.

Compared to the last PIB auction held on May 22, 2024, the yields for the 3-year and 10-year PIBs have all inched lower by 4bps, and 5bps, respectively, while it stands unchanged for the 5-year ones.

To note, in that respective auction, the central bank secured Rs96.88bn for 3,5 and 10 years against a target of Rs190bn, and yields dropped by up to 5bps.

The persistent decline in auction yields is largely attributed to the central bank's policy rate cut of 150 basis points on June 10, 2024, which was implemented in response to slowing inflation.

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