Govt to borrow Rs4.5trln from MTBs, PIBs auctions in Aug-Oct

KARACHI: The government aims to borrow Rs4.5 trillion from the domestic market in the three months (September to November) to fund the budget deficit, the central bank’s auction calendar showed on Friday.

The planned borrowings are lower than the August-October target of Rs5.3 trillion

The government will borrow Rs3.9 trillion from the auctions of Market Treasury Bills (MTBs), while it also plans to attract Rs600 billion through the sale of Pakistan Investment Bonds (PIBs).

The State Bank of Pakistan would sale Rs450 billion worth of fixed rate Pakistan Investment Bonds (PIBs) and Rs150 billion worth of five, and Rs150 billion worth of three-year floating rate PIBs. It would also auction Rs150 billion worth of a two-year floating rate PIB.

The government adhered to its commitment of zero fresh borrowings from the State Bank of Pakistan, so it is continually dependent on bank borrowing to meet its financing needs.

The government expects the budget deficit to decline from 7.1 percent of GDP last year to 6.3 percent in FY2022, on the back of strong growth in both tax (24.6 percent (year-on-year), and non-tax revenue (24.7 percent), mainly from income and sales tax as well as the petroleum development levy.