KARACHI: The federal government has planned to borrow over Rs 10 trillion in the second quarter (Oct-Dec) of this fiscal year (FY24) through sale of security papers to meet its financial requirements.

The federal government will borrow this amount through auction of security papers including Pakistan Investment Bonds Fixed Rate, Pakistan Investment Bonds (PIBs) Floating Rate and Government of Pakistan Market Treasury Bills (MTBs).

The State Bank of Pakistan (SBP), on behalf of the federal government on Tuesday issued auction calendars for borrowing from the domestic banking system. According to the auction calendar, major financing requirements will be made through sale of short-term government papers. The federal government is intended to raise some Rs 7.905 trillion through sale of MTBs during the second quarter of this fiscal year as against the maturing amount of Rs 8.948 trillion. The borrowing amount Rs 2 trillion lower than the maturing amount for this quarter. Overall, some 7 auctions of T-Bills to be conducted to meet the financing target.

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An amount of Rs 1.5 trillion will be borrowed in October 2023. Over 3.825 trillion will be raised in November 2023 through three auctions of short-term government papers. In addition, Rs 2.580 trillion will be borrowed in December 2023.

The federal government has also planned to borrow worth Rs 2.76 trillion through sale of long-term Pakistan Investment Bonds (PIBs) during the second quarter of FY24. This includes Rs 480 billion through sale of PIB Fixed Rate, Rs 1.020 trillion PIB Floating Rate Semi-Annual Auction and Rs 1.260 trillion against sale of 2-year and 3-year PIB (Floating Rate) Quarterly Auction. Cumulatively, the federal government would raise Rs 10.665 trillion during Oct-Dec 2023 from the domestic market through sale of short term and long-term security papers to fill the financing gap.

Copyright Business Recorder, 2023