The State Bank of Pakistan (SBP) faced a substantial shortfall in its Borrowing target as it managed to raise a mere PKR3.66 billion from the sale of fixed-rate Pakistan Investment Bonds (PIBs), falling significantly short of its ambitious goal of PKR160 billion.

In this auction, the central bank was only able to secure PKR1.28 billion for 3-year bonds, PKR200 million for 5-year bonds, and a modest PKR100.5 million for 10-year bonds. Notably, there was a conspicuous absence of interest in the 15, 20, and 30-year PIBs, as there were no takers for these longer-term investments.

The cut-off yields, which determine the returns for investors, were set at 19.3449% for the 3-year PIB, 16.95% for the 5-year PIB, and 15.25% for the 10-year PIB. Comparing these rates to the previous auction held on August 02, the yield for the 3-year PIB remained unchanged. However, there was a significant increase of 100 basis points in the yield for the 5-year PIB, signifying higher returns for investors in this category. Interestingly, the 10-year PIB made a return to the market after a one-year absence.

Additionally, the SBP managed to acquire an extra Rs2.08 billion from non-competitive bids, bolstering the total amount raised to Rs3.66 billion.

Despite the lackluster performance, it’s worth noting that the SBP received bids totaling a substantial Rs138.5 billion. Nevertheless, the central bank chose to accept only a fraction of this amount, amounting to slightly less than 3% of the total bids.

In the preceding PIB auction conducted on August 02, the SBP had a more successful outing, raising Rs71 billion. The cut-off yields for that auction were 19.3499% for the 3-year PIBs and 15.9500% for the 5-year PIBs. Interestingly, bids for the 10-year PIBs were rejected in that particular auction.

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