The cash-strapped government intends to borrow Rs 4.7 trillion from banking sector during the next three months (May-July) of 2019 for tackling fiscal deficit. The State Bank of Pakistan (SBP) has issued three calendars for the auction of Market Treasury Bills (MTBs), Pakistan Investment Bond (PIBs) Floating Rate and PIBs Fixed Rate. According to these calendars, the federal government has set a tentative target of Rs 4.75 trillion for borrowing from domestic banking sector during May-July to meet its financial needs.
According to the auction calendar, the federal government would borrow Rs 650 billion through long-term investment bonds and some Rs 4.1 trillion through the sale of short-term government papers. Three auctions of 3-, 5-, 10- and 20-year PIBs (Fixed Rate) will be held on May 29, June 26 and July, 24, 2019 with a target amount of Rs 100 billion for each auction. In addition, three auctions of PIB (Floating Rate) are planned during the next three months for cumulative borrowing of Rs 350 billion.
The federal government will borrow Rs 4.1 trillion from banking sector through the sale of Pakistan Market Treasury Bills of 3-month, 6-month and 12-month in May-July 2019. The auction for MTBs will be held fortnightly and total 6 auctions have been announced by the State Bank to achieve the borrowing target.
The first auction of the T-bills is scheduled for May 8, 2019 for borrowing Rs 1.2 billion. This auction will have maturing amount of Rs 2.17 trillion. The second auction will be held on May 22, 2019, with a tentative target of Rs 600 billion.
Some one trillion rupees will be borrowed on June 5 and June 19, 2019 through two auctions for short-term bonds. The last two auctions have been planned as on July 3 and July 17, 2019 with a tentative target of Rs 600 billion and Rs 700 billion, respectively. The SBP says the MTBs auction for June 5, 2019 with the settlement date of June 6, 2019 may be rescheduled subject to Eid-ul-Fitr holidays.
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