KARACHI: The State Bank of Pakistan (SBP) on Wednesday raised no amount through the auction of Pakistan Investment bonds (PIBs) as the government rejected all bids against a target of Rs175 billion.
The bids for three-year, five-year, and 10-year were rejected, while no bids were received for 15, 20, and 30 years’ papers, according to the SBP’s auction result.
Analysts said the government rejected bids for the PIBs as investors were seen asking for higher returns.
The central bank has raised the benchmark policy rate by a cumulative 900 basis points to 16 percent since the beginning of the tightening cycle in September 2021.
Rising inflation and slippages on the current account necessitated a strong monetary policy response, according to analysts.
Surprise 100 bps hike in November monetary policy, which was most likely made under pressure from the International Monetary Fund, and a negative real interest rate of 7.8 percent infer that more tightening is to come.