SBP raises Rs133.5bn through PIBs, yields fall below 11%

January 27, 2022 (MLN): The State Bank of Pakistan (SBP) has raised Rs133.5 billion on Thursday, against the target of Rs100 billion by selling fixed-rate Pakistan Investment Bonds (PIBs).

The Cut-off yields for all the maturities fell below 11% for the first time since September 15 PIBs auction.

The cut-off yield for 3-year PIBs dropped by 71bps to 10.79%, for 5-year PIBs cut-off yields fell by 72bps to 10.86% while the cut-off yield for 10-year PIBs decreased by 79bps to 10.97%.

Against the auction target of Rs100 billion, SBP received total bids of Rs766.5 billion.

SBP received bids worth Rs273.6 billion for 3-years, Rs254.6 billion for 5-years, Rs235.27 billion for 10-years, Rs2.05 billion for 15-years, and Rs1.01 billion for 20-year PIBs.

The SBP accepted Rs83.5 billion for 3-year papers, Rs40 billion for 5-year, and Rs10 billion for 10-year PIBs. However, no bids were received for 30-year bonds while the central bank rejected the bids for the 15-year and 20-year bonds.

To recall, the SBP recently maintained the policy rate at 9.75% and signalled that borrowing costs would remain stable for now, as recent tax increases were expected to curb demand and reduce the country’s budget deficit.

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