KARACHI: The federal government on Wednesday raised Rs 466.5 billion from the domestic banking system through the auction for short-term government securities to finance the fiscal deficit.

The State Bank of Pakistan (SBP) on Aug 10, on behalf of the federal government, conducted the auction for the sale of 3-, 6- and 12-month Government of Pakistan Market Treasury Bills (MTBs). Overall, bids amounted to Rs 910.5 billion were received for the sale of all three tenors’ government security papers. In addition, non-competitive bids worth Rs 52.739 billion were submitted. Most of bids worth Rs 529 billion were received for 3-months period MTBs.

Out of the received bids, the federal government borrowed Rs 466.5 billion through sale of short-term bonds. This included Rs 52.739 billion of non-competitive bids of all three short term bonds.

The government raised Rs 378.223 billion including Rs 39 billion of non-competitive bids against sale of 3-month T-bills at a cut-off yield of 15.6957 percent.

Bids worth Rs 17.413 billion including Rs 7.4 billion of non-competitive were accepted for sale of MTBs of 6-month tenure at 15.7930 percent. The federal government also borrowed Rs 71 billion against the sale of 12-month and its cut-off yield was set at 15.8869 percent.

In addition, an auction for the Sale of 2- and 3-year Pakistan Investment Bond Floating Rate (PFL) Quarterly auction was also held on August 10, 2022 with the settlement date of August 11, 2022. Overall, some Rs 173 billion borrowed through sale of PFL. An amount of Rs 99.118 billion was borrowed against 2-year long-term bonds at a cut-off price of Rs 99.1885 percent. Some 3-year bonds worth Rs 74 billion were sold at 97.6460 percent.

Copyright Business Recorder, 2022