SBP raises Rs173.8bn through PIB-PFL auction

January 10, 2024 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Wednesday in which it sold Pakistan Investment Bond – Floating Rate (PIB-PFL) semiannual and quarterly worth Rs173.798 billion for 2, 3, 5 and 10 years against a target of Rs280bn.

SBP received bids worth Rs554.6bn for PIB-PFL semiannual and Rs84.333bn for PIB-PFL quarterly, out of which the central bank accepted Rs161.694bn and Rs12.104bn respectively.

The amount raised through PIB-PFL quarterly comes entirely from the 3-year tenure bond as the central bank did not accept bids for the 2-year quarterly PIB.

The total amount of Rs12.104bn raised through PIB-PFL quarterly includes Rs10.5bn raised through competitive bids and the remaining Rs1.604bn through non-competitive bids.

Additionally, Rs110.894bn was raised through the 5-year PIB-PFL semiannual, while Rs50.8bn was raised through the 10-year semiannual bond.

The total sum raised through 5-year and 10-year semiannual bonds represents Rs148.25bn raised by SBP through competitive bids and the remaining Rs13.444bn raised through non-competitive bids.

The cut-off price for the 3-year PIB-PFL quarterly was Rs98.147.

While for the PIB-PFL semiannual, the cutoff was Rs96.4921 for the 5-year bond and for the 10-year one it stood at Rs94.4061.

The settlement date for the successful bids is January 11, 2024.

To note, the target for the PIB-PFL semiannual was to raise Rs120bn through the sale of 5-year and 10-year PIB, Rs60bn each.

In the case of PIB-PFL quarterly, it was to raise Rs160bn with the sale of 2-year and 3-year PIB-FRF, Rs80bn each.

The central bank, in the last auction held on December 27 sold PIBs-PFL worth Rs53.15bn for 2, 3, 5 and 10 years against a target of Rs280bn.

The cut of price stood at Rs98.1129, Rs96.3392 and Rs93.9849 for the 3-year PIB-PFL quarterly, 5-year and 10-year PIB-PFL semiannual respectively.

When compared with today's cut-off price, it becomes evident that yields have dropped, leading to a slight increase in the cutoff price.

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