SBP raises Rs396.57bn through PIB auction, yields drop by up to 19 bps

December 20, 2023 (MLN): The State Bank of Pakistan (SBP) raised Rs396.572 billion against a target of Rs190bn through the sale of fixed-rate Pakistan Investment Bonds (PIBs).

The central bank picked up Rs151.7bn for 3 years, Rs39.5bn for 5 years, and Rs103.96bn for 10 years bonds through competitive bids.

In addition to the competitive bids, SBP picked up Rs101.411bn from non-competitive bids, taking the total amount raised to Rs396.57bn.

To note, no short selling took place during the auctions and no bids were received for the 15, 20, and 30-year PIB.

The cut-off yields stood at 17.199%, 15.88%, and 15% for the 3-year, 5-year, and 10-year periods, respectively.

In comparison to the last PIB auction held on November 08, the yields for the 3-year, 5-year, and 10-year PIBs recorded a notable decrease of 19, 7, and 10 basis points (bps) respectively.

The decline in yields is attributed to market participants' expectations that interest rates have peaked and are expected to fall in the coming months.

To note, in the last PIB auction, SBP raised Rs252.3bn against a target of Rs160bn through the sale of PIBs and the yields dropped by up to 180 bps         

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