Govt sells Rs38.84bln worth of PIBs

KARACHI: The government on Wednesday raised Rs38.84 billion through an auction of a fixed rate Pakistan Investment Bonds (PIBs) to help finance the budget deficit.

The fetched amount was lower than the pre-auction target of Rs140 billion. The cut-off yield for three-year PIBs stood at 8.2000 percent at which the government borrowed Rs16.6 billion.

Through the five-year bonds, the government raised Rs187 billion at the cut-off yield of 8.4500 percent.

Meanwhile, an amount of Rs55 billion was fetched for 10 years PIBs at a yield of 8.9900 percent.

The government raised Rs12 and Rs10 billion through the sale of 15 and 20 years PIBs. The yields on these two tenors stood at 9.9800 percent and 10.5500 percent, respectively.

“Investors expect the interest rates to remain unchanged after the central bank deferred the monetary policy announcement till September. However, they (investors) anticipate inflation will see an upward trend in coming months,” an analyst said.

The consumer price index inflation increased to 9.3 percent in July, compared with 8.6 percent in the previous month and 8.4 percent in July 2019, mainly due to rise in food prices.

The State Bank of Pakistan will announce the next monetary policy in September. The SBP slashed a policy rate by 100 basis points to 7 percent in its last monetary policy meeting held on June 25.