Pakistan seeks Rs4.8tr via T-bill, PIB auctions in September-November

KARACHI: The government plans to raise Rs4.825 trillion through the auctions of Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs) between September and November 2025, the central bank said on Monday.

This borrowing target is lower than previous plans, as the government had intended to generate Rs6.2 trillion through T-bill and bond auctions during the August-October period.During the three months ending in November, the government aims to raise Rs2.875 trillion via T-bills with maturities of one, three, six, and twelve months. Moreover, it plans to sale fixed- and floating-rate PIBs with maturities of two, three, five, 10 and 15 years, seeking to borrow Rs1.950 trillion from commercial banks, the State Bank of Pakistan said in its auction calendar for government securities.

Analysts said the latest auction targets point to a clear shift in its borrowing strategy.While about Rs2.9 trillion will be raised through T-bills, maturities are higher at Rs4 trillion, which means the government is actually retiring over Rs1.1 trillion in short-term debt, said Saad Hanif, head of research at Ismail Iqbal Securities.

At the same time, it is targeting close to Rs2 trillion in PIBs, split between regular fixed-rate bonds and an additional series of 10-year issues, Hanif added.“In simple terms, the authorities are reducing their reliance on short-term borrowing and leaning more on longer-tenor bonds to spread out repayment risks and lock in funds at prevailing rates. Even within T-bills, a larger share is being placed in the 12-month paper, suggesting greater confidence in extending maturities,” he said.

“This approach is sensible from a debt management perspective, though much will depend on how participants respond to the cut-off yields in upcoming auctions and reveal whether the market is willing to absorb this duration shift without demanding a premium,” he added.

The auction targets come just a day after the government revealed that it has repaid over Rs1.6 trillion of debt to the SBP. The finance ministry reported that Rs1.133 trillion was repaid on August 29, and Rs500 billion was cleared in June, bringing total early repayments to over Rs2.6 trillion in less than one year.

According to the government, this action represents a significant shift from previous debt-heavy practices, where excessive borrowing limited fiscal space and heightened risks. Pakistan has reduced its SBP debt from Rs5.5 trillion to Rs3.8 trillion — almost a 30 per cent reduction — well ahead of its 2029 maturity.

The SBP reported a net profit of Rs2.5 trillion for the fiscal year 2025, with Rs2.428 trillion transferred to the government. Analysts believe this inflow will help decrease government borrowing requirements and support fiscal health, providing a buffer for macroeconomic stability at a time when climate-related risks are on the rise.

Pakistan’s inflation unexpectedly dropped to 3.0 per cent in August from 4.0 per cent in the previous month. Market players and analysts are now watching closely to see if the SBP will cut interest rates during its upcoming policy meeting on September 15, especially given that torrential monsoon rains may disrupt supply chains and drive prices

The central bank held the key interest rate steady at 11 per cent last month, contrary to analyst expectations, due to a deteriorating inflation outlook amid rising energy prices. The SBP has reduced its benchmark interest rate from 22 per cent to 11 per cent since June 2024.