SBP raises Rs298.5bn through PIBs auction, yields dip by 5bps

August 3, 2022 (MLN): The State Bank of Pakistan (SBP) raised Rs298.5 billion on Wednesday, against the target of Rs175 billion by selling fixed-rate Pakistan Investment Bonds (PIBs).

The cut-off yield for 3-year and 5-year PIBs decreased by 5bps to 13.94% and 13.4% respectively.

Against the auction target of Rs175 billion, SBP received total bids of Rs702 billion.

The highest participation was seen in 5-year bonds as SBP received bids worth Rs168 billion for 3-year, Rs348 billion for 5-year, and Rs186 billion for 10-year. However, no bids were received for 15-year, 20-year and 30-year bonds.

The SBP accepted Rs83 billion for 3-year papers and Rs191 billion for 5-year papers. While the central bank rejected the bids for the 10-year bonds.

With IMF in place, the current account deficit is expected to shrink in the coming months, Rupee I recovering against the USD and economic growth signaling slowdown; today’s auction also indicated market anticipating stability in interest rates from here on, hence heavy participation was witnessed in the higher end of the curve, he added.

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