SBP raises Rs85.343bn through PIB auction, yields inch up by up to 5bps

February 14, 2024 (MLN): The State Bank of Pakistan (SBP) raised Rs85.343 billion against a target of Rs125bn through the sale of fixed-rate Pakistan Investment Bonds (PIBs).

In today's auction, the offered amount totaled Rs223.312bn.

The central bank picked up Rs65.268bn for 3 years, Rs12.75bn for 5 years, and Rs544m for 10-year bonds through competitive bids.

In addition to the competitive bids, SBP picked up Rs7.491bn from non-competitive bids. Furthermore, the auction witnessed short selling of Rs2.29bn, taking the total amount raised to Rs85.343bn.

To note, no bids were received for the 15, 20, and 30-year PIB.

The cut-off yields stood at 16.7999%, 15.5499%, and 14.5% for the 3-year, 5-year, and 10-year periods, respectively.

Compared to the last PIB auction held on January 16, 2024, the yields for the 3-year and 10-year PIBs remain unchanged, while for the 5-year fixed rate bond, the yield inched up by 5bps.

The sudden and slight uptick in yield comes as a result of the central bank's decision to maintain the interest rate at 22% for the fifth consecutive meeting held on January 29, 2024.

To note, in the last PIB auction, SBP raised Rs157.53bn against a target of Rs190bn through the sale of PIBs and the yields dropped by up to 50bps.

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