SBP to auction Rs1.425trln govt papers

KARACHI: The State Bank of Pakistan (SBP) will auction treasury bills and long-term papers worth Rs1.425 trillion in the Oct-Dec period to help fund the government’s budget deficit, it said on Monday.

The latest auction calendar, released by the SBP, showed that the government planned to borrow Rs1.225 trillion through the sale of three-, six-, and 12-month market treasury bills. The government is also set to raise Rs200 billion through the sale of three-, five-, and 10-year Pakistan Investment Bonds (PIBs). Total Rs1.058 trillion worth of treasury bills and Rs35.473 billion of PIBs are maturing.

The government requires financing to fund its fiscal deficit, which is set at 3.8 percent of GDP for the current fiscal year.   The banks benefited from increased government’s borrowings through investment in its short- and long-term securities. The outstanding stock of bank holdings in the government papers (T-bills and PIBs) rose to Rs6.214 trillion as on August 31 from Rs5.767 trillion in the same month last year.    

The government fixed bank borrowing target at Rs453 billion for the fiscal year of 2016/17. The government borrowed Rs1.36 trillion from commercial banks in FY16 compared with Rs1.413 trillion in FY15.