Deferred payment: government purchases Sukuk amounting to Rs 208 billion from IBI

The federal government on Wednesday purchased Sukuk amounting to Rs 208 billion from Islamic Banking Industry (IBI) on a deferred payment of one year. State Bank of Pakistan (SBP) on Wednesday conducted auction of outright purchase (Bai Mujjal) of Government of Pakistan Ijara Sukuk (GIS) 9, 10,11,12 and 13 by the federal government. A week earlier, SBP announced to initiate outright purchase of GIS to facilitate the Islamic Banking Industry (IBI) for liquidity management.
First auction was held on Tuesday, however all bids were rejected by the federal government. The second auction was conducted on Wednesday, which fetched bids amounting to Rs 221.125 billion. Out of the received bids, the federal government accepted bids worth Rs 208.575 billion (face value) on one-year deferred payment of Rs 225.359 billion. Sources said that Sukuk were purchased even lower than Market Treasury Bills rates, resulting in Rs 600 million saving to the federal government and loss to the Islamic banking industry. The offered GIS9 to GIS13 are going to expire next month on 21st November and purchase of GIS on deferred payment by the federal government has provided an opportunity to IBI to invest a huge billion for another one-year.