The cut-off yields on the fixed-rate Pakistan Investment Bonds (PIBs) were down by 9-11 basis points (bps) in the auction of the paper on Wednesday.
According to the data released by the State Bank of Pakistan (SBP), the government raised Rs. 99.5 billion against an initial target of Rs. 100 billion in yesterday’s auction as a result of the central bank’s unchanged interest rate.
The government raised Rs. 4 billion against a targeted amount of Rs. 30 billion for the three-year paper. Against the five-year paper, the government raised Rs. 45 billion against a target of Rs. 25 billion.
Moreover, it raised Rs. 50.5 billion against a target of Rs. 20 billion through the 10-year bond during yesterday’s auction.
Conversely, the government rejected all the bids received for the 15-year and 20-year papers and did not attract any proffers or bids for the 30-year paper.
The central bank recently kept the policy rate unchanged at 9.75 percent and signaled that borrowing rates would remain flat for the time being while referencing prior tax hikes as the main reason since these increases were aimed at lowering the country’s budget shortfalls and restoring the demand to comfortable levels.
