SBP to conduct another T-bills buyback auction with Rs500bn target

October 03, 2024 (MLN): The State Bank of Pakistan (SBP) has invited bids for the Market Treasury Bills (MTBs) buyback auction scheduled for October 09, 2024, with a target of Rs500 billion.

While the competitive auction will be held on October 10, the central bank said.

Details of the buyback securities are given below:

It is important to note that these T-bills being repurchased are set to mature in December 2024, a period marked by significant maturities, totaling around Rs4.6 trillion in T-bills, brokerage house Arif Habib Limited highlighted.

In a historic move, SBP on Monday conducted the first-ever buyback auction for MTBs in which it repurchased Rs351bn against Rs500bn target.

The buyback cut-off yield was around 16% for the six- and 12-month papers, which were originally sold at around 20-21% rates.

According to AHL's estimates, this buyback saved the government Rs11.6bn, while also easing the December 2024 debt obligations.

"The impetus for this timing is a recent liquidity boost, we believe, courtesy of a Rs2.7tr transfer from the SBP," AHL said.

The MTBs Rules 1998 provide for the buyback of MTBs by the Government of Pakistan.

The buyback price of the security will be determined through multiple-price competitive auction process.

All Primary Dealers will be eligible to submit competitive bids in the auctions. Non-competitive bids can also be submitted as per existing instructions.

On settlement date, the bought back securities will be debited from the SGLA of successful bidders while their current accounts will be credited with the accepted price.

Moreover, all other auction rules and procedures will apply to the buyback auctions as defined in various auction related circulars, SBP said.

Copyright Mettis Link News