SBP to raise Rs.7 trillion from govt securities

August 5, 2019 (MLN): The State Bank of Pakistan (SBP) plans to raise Rs.7 trillion from sale of Market Treasury Bill (MTB)’s and Pakistan Investment Bonds (PIB)’s (fixed rate and floating rate) during August and October 2019.

According to a recent announcement by the central bank, the rounded off auction target for the short term MTB of 3-Months, 6-Months and 12-Months has been set at Rs.6.4 trillion while target for the longer term PIB (fixed rate) for 3, 5, 10, and 20 years is aimed at Rs.300 billion.

The remaining Rs.300 billion are expected to be raised from a 10 year PIB with floating rate.

The fixed coupon rates for PIB’s have been announced at 7.25% for 3 years, 8% for 5 year, 8.75% for 10 years whereas 10.75% has been announced for 20 year PIB’s.

The total of Rs.600 billion target for PIB’s has been broken down into three equal tranches. Auctions to raise the first installment will take place of August 21, 2019, the second will take place of September 18, 2019 while the last auction will be carried out on October 30, 2019.

Auction target for the sale of Pakistan Investment Bonds (Fixed Rate) for 3, 5, 10, and 20 years for August, 2019 will be reopening of 12-Jul-2018, while the details of September, 2019, auction will be provided later.

The amount maturing during this two month period stands at a total of Rs.107.67 billion which shows an additional fund requirement of Rs.492.3 billion.

On the other hand, 6 MTB auctions will take place in this period on two week intervals (except for the second one which falls on Eid Holiday – August 14, 2019). The first of these auctions has been scheduled for 2 days from now, August 7, 2019.

The maturing amount for MTB during this period is Rs.6.37 trillion with an additional requirement of Rs.30.8 billion.

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