SBP sells Rs49bln PIBs

KARACHI: The State Bank of Pakistan (SBP) sold Pakistan Investment Bonds (PIBs) worth Rs49.134 billion with yields further falling in Wednesday’s auction.
Analysts said the latest auction shows that the central bank will keep the policy rate on hold in its next monetary policy review meeting schedule for this week.
“There is no major shift in the yields of the government paper, but some minor downward fluctuations (was) seen, which is an indication of no further loosening in November-December period monetary policy stance by the State Bank’s central board of directors,” said analyst Ahsan Mehanti at Arif Habib Corp.
“The rebound in inflation and pressure on exchange rate may cause the monetary policy setters to keep the policy rate unchanged at six percent for the next two months,” Mehanti said.
The cut-off yield on five-year PIBs stood at 7.9999 percent, down from 8.1805 percent and 10-year papers at 9.1507 percent against 9.2299 percent at the previous auction held in October 7.
The cut-off yield on three-year PIBs was 7.0270 percent down from the previous auction of 7.1967 percent.
The SBP sold Rs39.485 billion of the three-year papers and Rs9.438 billion of the five-year papers. Moreover, it sold 10-year PIBs worth Rs210 .25 million. It received total bids worth Rs48.524 billion as against an auction target of Rs50 billion.