The State Bank of Pakistan raised a total of 1,645.5 billion through the sale of market treasury bills (T-Bills) and floating Pakistan Investment Bonds (PIBs) with yields on both instruments remaining unchanged.
SBP raised PKR 913 billion in the last Treasury Bill (T-Bill) auction of 2024.
The auction saw participation of PKR 1,694 billion, with the government raising PKR 913 billion against a target of PKR 1,200 billion and a maturity of PKR 1,565 billion.
Current yields stood at 11.99% for the 3-month bond, 11.99% for the 6-month bond, and 12.29% for the 12-month bond.
Moreover, country’s central bank raised PKR 732.5 billion through floater PIBs against a target of PKR 650 billion. The spreads on the investment bonds also remained unchanged at 0.95% for 2-year paper and 1.45% on 5-year paper.
It may be mentioned here the foreign investors have withdrawn 64% of their investments from Pakistan’s T-Bills, with outflows reaching $550.6 million in the first five months of FY25.
Experts attribute this trend to falling interest rates, with T-Bill yields dropping sharply due to a 900 basis points cut in the policy rate since June.
Political uncertainty and better investment options abroad further deterred foreign inflows, which were net zero in early December. The highest inflows came from the UK ($596.6 million), UAE ($85 million), Australia ($52 million), and Bahrain ($50 million), but these were accompanied by significant outflows.
Experts warn that foreign investments in T-Bills could continue to dry up in the coming months.
