Govt borrows Rs1.67tr via T-bills
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The government has borrowed Rs1.67 trillion from private banks and other institutions in its latest treasury bill auctions.
The State Bank of Pakistan (SBP) raised Rs1.67 trillion through auctions for Pakistan Investment Bonds (PIBs) and Market Treasury Bills (MTBs) held on March 26, 2025, with settlement scheduled for April 3, 2025.
The PIB auction received total bids of Rs1,132.5 billion, with accepted bids amounting to Rs980.505 billion, including Rs972 billion in competitive bids and Rs8.505 billion in non-competitive bids. Notably, all bids for 2-year PIBs were rejected, while the 5-year tenor attracted Rs16.903 billion at a cut-off price of 96.8291. The 10-year PIBs dominated the auction, with Rs963.602 billion accepted at a cut-off price of 92.6071.
In the MTB auction, the SBP received bids worth Rs1,084.95 billion, accepting Rs689.768 billion, comprising Rs609.95 billion in competitive bids and Rs29.818 billion in non-competitive bids. The 1-month MTBs recorded the highest cut-off yield at 12.3898%, followed by 3-month and 12-month tenors at 12.0100%, while the 6-month MTBs closed at 11.9999%. The weighted average yields ranged between 11.8256% and 12.2483%, reflecting stable investor sentiment across short- to medium-term tenors.
The results highlight strong demand for government securities, particularly longer-dated PIBs, signalling the banking sector's reliance on government borrowing.
Meanwhile, the SBP has been actively intervening in the interbank foreign exchange (FX) market over the past several months, with interventions fluctuating between $536 million and $1,151 million. According to data from Topline Research and the SBP, FX interventions stood at $573 million in June 2024, rising to $722 million in July before dropping to $569 million in August. A significant increase was observed in September, with interventions reaching $946 million, followed by further hikes to $1,026 million in October and a peak of $1,151 million in November. By December, interventions declined to $536 million. These interventions are often criticised for keeping the dollar high, benefiting exporters while limiting potential rupee appreciation. Without these purchases, the rupee could have been stronger against the greenback.
The Pakistani rupee recorded a slight gain against the US dollar, appreciating 0.06% in the interbank market on Wednesday. By the close of trading, the currency stood at 280.26, marking an increase of 16 paisa from the previous day's 280.42.
Meanwhile, gold prices in Pakistan remained stable on Wednesday, with the precious metal selling at Rs317,800 per tola, unchanged from the previous session, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). This stability followed a Rs800 per tola decline on Tuesday.
The global gold market also remained steady, with international rates holding at $3,021 per ounce, as per APGJSA. Adnan Agar, Director at Interactive Commodities, noted that the gold market remains lacklustre, confined to a narrow trading range of $3,005 to $3,035 per ounce. He attributed this stagnation to the absence of major economic data from the US and ongoing uncertainty regarding tariffs and geopolitical tensions between Russia and Ukraine.
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