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Express Tribune
11-07-2025
- Business
- Express Tribune
State Bank injects Rs1.7tr via dual OMOs
Listen to article The State Bank of Pakistan (SBP) on Friday injected a total of Rs1.72 trillion into the banking system through simultaneous conventional and Shariah-compliant open market operations (OMOs), aimed at addressing liquidity needs. Earlier on Wednesday, the government had borrowed Rs1.62 trillion through auctions of securities, with a substantial proportion of Rs1.413 trillion being raised from the Market Treasury Bills (MTBs) and Rs208.42 billion from the 10-year Pakistan Investment Bonds Floating Rate (PFL). The government is compelled to borrow from the private sector amid limits from the International Monetary Fund (IMF) on borrowing directly from the central bank. Therefore, the central bank has to go through this cycle of injecting money through OMOs and then borrowing back from the private sector through securities to bridge the fiscal deficit of the government. According to official data, the SBP accepted bids worth Rs1.48 trillion under its conventional reverse repo operation, with a realised value of Rs1.43 trillion. The OMO included injections of Rs154.25 billion for seven-day tenor at a rate of return of 11.09% and Rs1.32 trillion for 14-day tenor at 11.07%, with 24 bids accepted out of 27 received. In parallel, the central bank conducted a Mudarabah-based Shariah-compliant OMO, where it injected an additional Rs243 billion, with a realised value of Rs244.9 billion. The Islamic OMO consisted of Rs40 billion accepted for seven days at a rate of 11.13% and Rs203 billion for 14 days at 11.12%. All three bids received were accepted, reflecting growing market interest in Shariah-compliant instruments. The cumulative injection of liquidity comes at a time when the SBP has been easing monetary conditions, having recently cut the policy rate amid a downward trend in inflation. The strong demand for 14-day funds in both OMOs highlights banks' preference for locking in medium-term liquidity, possibly in anticipation of further monetary easing. Furthermore, the rupee posted a marginal gain against the US dollar on Friday, appreciating by 0.04% in the inter-bank market. By the end of trading, the rupee closed at 284.46, marking an improvement of 10 paisa compared to Thursday's closing rate of 284.56. Meanwhile, gold prices in Pakistan climbed sharply on Friday, tracking gains in the international market, where the yellow metal surged over 1% to a more than two-week high. The rally was driven by renewed safe-haven demand after President Donald Trump reignited trade tensions by announcing fresh tariffs, escalating fears of a global trade war. In the domestic market, the price of gold per tola rose Rs2,300 to settle at Rs357,000, according to data released by the All Pakistan Sarafa Gems and Jewellers Association. Similarly, the rate for 10 grams of gold increased Rs1,971 to Rs306,069. This follows Thursday's sharp uptick of Rs3,200 per tola, when gold closed at Rs354,700. Globally, spot gold was up 1.2% to $3,363.46 per ounce by 11:32 am EDT (1532 GMT), its highest since June 24. US gold futures gained 1.6% to $3,377.80, according to Reuters. Adnan Agar, Director at Interactive Commodities, explained the international trend, saying: "Gold touched a low of $3,322 and a high of $3,368 today (Friday) and is trading around $3,355. Renewed tariff threats from Trump have triggered another wave of buying in gold." He noted that unless a breakthrough occurs in trade negotiations after August 1, gold is expected to continue trading within a range of $3,270 to $3,420. "If tariffs persist beyond August, we could see further upside. Otherwise, history shows that Trump often backtracks or secures last-minute deals, which could cap gold's rise," Agar added.
Express Tribune
10-07-2025
- Business
- Express Tribune
Govt raises Rs1.62 trillion via T-bill, bond auctions
Listen to article The State Bank of Pakistan (SBP) mobilised approximately Rs1.62 trillion through its latest auctions of government securities, of which a substantial proportion, Rs1.413 trillion, was raised from Market Treasury Bills (MTBs) and Rs208.42 billion from 10-year Pakistan Investment Bonds Floating Rate (PFL). The MTB auction reflected strong investor appetite across all four tenors. The SBP accepted bids worth Rs214.28 billion for one-month papers at a cut-off yield of 11.24%, Rs474.70 billion for three-month papers at 10.9977%, Rs180.52 billion for six-month bills at 10.8976% and Rs543.88 billion for 12-month bills at 10.80%. The highest allocation was seen in the 12-month tenor, indicating increasing investor interest in slightly longer-term instruments amid a downward yield trend. Non-competitive bids in the MTB auction totalled Rs379.78 billion, with a major share – Rs310.63 billion – going into the three-month tenor, further underscoring the market's preference for shorter durations. In the 10-year PFL auction, the SBP accepted competitive bids worth Rs202 billion and non-competitive bids of Rs6.42 billion, with the issue settling at a cut-off price of Rs94.5739. Although the total raised slightly missed the Rs1.7 trillion mark, analysts note that the dominance of MTBs and a flattening yield curve suggest growing interest in longer-tenor government securities. Market watchers await details of any additional auctions that could bridge the gap and complete the government's near-term borrowing target. Moreover, the Pakistani rupee experienced a slight depreciation against the US dollar in the inter-bank market, closing at Rs284.47 to a dollar, down 0.04% from the previous day's rate of Rs284.36. Gold drops Rs3,000/tola Local gold prices dropped on Wednesday, mirroring a decline in the international market where rates fell to their lowest level in over a week due to a stronger US dollar and ongoing trade negotiations involving the United States. According to the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), the price of gold per tola fell Rs3,000 to settle at Rs351,500, while the rate for 10 grams dropped Rs2,572, closing at Rs301,354. This followed a rise on Tuesday when gold had gained Rs1,500 per tola to reach Rs354,500. Spot gold was down 0.1% at $3,297.19 per ounce, as of 9:23 am ET (1323 GMT), after hitting its lowest level since June 30 earlier, according to Reuters. US gold futures fell 0.3% to $3,306.10. The US dollar index hovered near a two-week high, making bullion less attractive for overseas buyers. The yield on benchmark 10-year US Treasury notes remained close to a three-week peak.
Express Tribune
07-07-2025
- Business
- Express Tribune
Govt plans Rs4.9tr borrowing
The State Bank of Pakistan (SBP) has announced the auction calendar for Pakistan Investment Bonds (PIBs) and Market Treasury Bills (MTBs) for the third quarter of FY2025 (JulySeptember), targeting a combined amount of Rs4.875 trillion. The move is part of the government's domestic borrowing strategy aimed at meeting fiscal needs and managing public debt efficiently amid International Monetary Fund (IMF) restrictions on direct central bank borrowing. For fixed-rate PIBs, the SBP has scheduled three auctions with a total target of Rs1 trillion. These will be held on July 16 (Rs300 billion), August 1 (Rs300 billion), and September 4 (Rs400 billion). Available tenors include 2-year zero coupon, 3-year (10.50%), 5-year (11.00%), 10-year (11.50%), and 15-year zero coupon instruments. Alongside these, the SBP will conduct floating rate PIB auctions, with a cumulative target of Rs1.4 trillion. The first such auction is scheduled for July 9 with a Rs300 billion target, followed by several others across the quarter. Six auctions of MTBs are also planned during the quarter, aiming to raise Rs3.175 trillion. The auction dates are July 9 (Rs1,350 billion), July 24 (Rs300 billion), August 7 (Rs425 billion), August 21 (Rs325 billion), September 4 (Rs550 billion), and September 17 (Rs225 billion). The bills will be offered in 1-month, 3-month, 6-month, and 12-month tenors. The largest allocation, Rs950 billion, is reserved for the 12-month duration, reflecting a preference for medium-term borrowing. Meanwhile, gold prices in Pakistan dropped sharply on Monday, mirroring a decline in international bullion rates as the US dollar gained strength and investors responded to geopolitical developments, particularly an update on US trade policy. According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold per tola fell by Rs2,500, settling at Rs353,000. The rate for 10 grams declined by Rs2,143, reaching Rs302,640. The rupee also recorded a slight depreciation in the interbank market, slipping by 0.09%. The local currency closed at 284.22, down by Re0.25 compared to the previous session's close of 283.97.
Express Tribune
19-06-2025
- Business
- Express Tribune
Profit, dividend repatriation surges 117% MoM
China remained the largest foreign direct investor with investment of $373 million in the first 11 months of FY22. Photo: file Listen to article Repatriation of profits and dividends from foreign investment in Pakistan stood at $264 million in May 2025, showing a significant 71% year-on-year (YoY) decline but a sharp 117% month-on-month (MoM) increase, according to data released by the State Bank of Pakistan (SBP). During the first 11 months of fiscal year 2024-25 (11MFY25), total repatriation reached $2.1 billion, reflecting a 16% YoY growth compared to $1.8 billion during the same period of last year, according to Arif Habib Limited. Among different sectors, the financial business segment led outflows in May with repatriation worth $76.4 million, despite a steep 76% YoY drop. The power sector followed with $56.5 million, down 51% YoY. On the contrary, the cement sector saw a notable surge of 229% YoY to $5.4 million while the chemical sector posted an even stronger increase of 929% YoY to $5.3 million. Moreover, repatriation from oil and gas exploration sector skyrocketed 997% YoY to $36.4 million whereas the transport sector registered a rise of 92% YoY to $1.9 million. Communication and beverage sectors witnessed sharp declines of 86% and 85% YoY, respectively. For the cumulative 11MFY25 period, the power sector remained the largest contributor with total repatriation of $396.2 million, followed by financial businesses at $364.6 million. A substantial growth was recorded in repatriation from oil and gas exploration firms (up 1,143%) and tobacco and cigarette sector (up 157%). On a monthly basis, profit and dividend repatriation peaked in May 2024 at $918 million while May 2025 marked a significant recovery over the previous month but its figure was considerably lower compared to last year's high. T-bills oversubscribed The State Bank conducted an auction of Market Treasury Bills (MTBs) with a tenor of 22 days on Wednesday. A total amount of Rs915.6 billion was raised against the target of Rs900 billion, exceeding by Rs15.6 billion. The cut-off yield stood at 11.3067% while the weighted average yield was slightly lower at 11.2952%. Currency in circulation saw a notable week-on-week (WoW) increase of 5.5% to reach Rs10.83 trillion as of June 6, 2025, according to data released by the SBP and compiled by AKD Securities. This represents an 18.9% increase so far in the current calendar year, reflecting heightened cash demand in the economy. Broad money (M2), however, remained largely flat on a weekly basis at Rs38.1 trillion, showing no significant change from the previous week. In calendar year 2025, M2 has risen 6.9%, primarily driven by a sharp rise in currency in circulation. Meanwhile, the Pakistani rupee posted a slight loss against the US dollar, slipping 0.05% in the inter-bank market on Wednesday. By the end of trading, the rupee closed at 283.55, down 14 paisa compared to the previous day's close at 283.41. Gold prices in Pakistan declined following stagnation in the international market where metal prices were little changed as investors waited for the Federal Reserve's policy decision and comments from Fed Chair Jerome Powell while platinum surged to a more than four-year peak. In the local market, the price of gold per tola dropped Rs2,245 to settle at Rs383,055. Similarly, the price of 10 grams of gold fell Rs1,925, reaching Rs307,831, according to the All Pakistan Sarafa Gems and Jewellers Association. In the global market, spot gold was steady at $3,387.89 an ounce by 1545 GMT, according to Reuters. Interactive Commodities Director Adnan Agar stated that the gold market remained uncertain, trading between $3,370 and $3,400, with its direction largely dependent on developments in the Israel-Iran conflict. If the war escalates with involvement of the US, gold prices are likely to surge. However, if tensions ease and peace talks progress, prices may stay range bound or decline. The upcoming US monetary policy decision could also influence prices, though any impact is expected to be limited if the outcome matches market expectations, Agar said.
Express Tribune
11-06-2025
- Business
- Express Tribune
Govt raises Rs1.1trin debt auctions
Listen to article The government raised approximately Rs1.1 trillion through auctions of Market Treasury Bills (MTBs) and floating-rate Pakistan Investment Bonds (PIBs). In the MTB auction, bids worth Rs853 billion were accepted by the State Bank of Pakistan. Similarly, the bond auction saw total acceptance of Rs206.91 billion. Meanwhile, the Pakistani rupee weakened against the US dollar on Wednesday, slipping 0.09%. By the day's close, the local currency stood at 282.47 per dollar, down 26 paisa compared to the previous close at 282.21. On the global front, both the US dollar and Chinese yuan remained stable as the two nations wrapped up trade negotiations in London, signalling a potential easing of their prolonged dispute, though details were limited. Gold prices in Pakistan edged higher on Wednesday, mirroring gains in the international market, where bullion rose following softer-than-expected US inflation data. The easing inflation bolstered expectations that the Federal Reserve may begin cutting interest rates by September, lifting investor sentiment. In the domestic market, the price of gold per tola increased Rs600 to Rs352,900 while the price for 10 grams rose Rs514 to Rs302,554, reported the All Pakistan Sarafa Gems and Jewellers Association. This followed a sharp drop on Tuesday when the per-tola price fell Rs6,100.
