SBP raises Rs96.9bn through PIB auction, yields down by up to 5bps

May 22, 2024 (MLN): The State Bank of Pakistan (SBP) conducted an auction on Wednesday in which it sold Pakistan Investment Bonds (PIBs) worth Rs96.88 billion for 3,5 and 10 years against a target of Rs190bn.

The offered amount totaled Rs203.9bn for the 3-year, 5-year and 10-year PIBs, while no bids were received for the 15, 20, and 30-year PIBs.

The central bank picked up Rs24.28bn for 3 years, Rs45.4bn for 5 years, and Rs14.95bn for 10-year bonds through competitive bids.

In addition to the competitive bids, SBP picked up Rs12.26bn from non-competitive bids, taking the total amount raised to Rs96.88bn.

The cut-off yields stood at 16.645%, 15.45%, and 14.3% for the 3-year, 5-year, and 10-year periods, respectively.

Compared to the last PIB auction held on April 16, 2024, the yields for the 3-year, 5-year, and 10-year PIBs have all inched lower by 1bps, 3bps, and 5bps, respectively.

The persistent decline in auction yields is due to strengthened hopes for a rate cut soon.

To note, in that respective auction, the central bank secured Rs6.83bn for 3,5 and 10 years against a target of Rs190bn, and yields dropped by up to 13bps.

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