KARACHI: The State Bank of Pakistan (SBP) on Thursday announced that it will conduct the auctions for the buyback of Market Treasury Bills (MTBs) on behalf of the government of Pakistan.
Bankers said that most probably with improved liquidity position, the government has decided to reduce domestic burden aimed at cutting interest expenses.
According to a circular issued by the SBP, the MTBs Rules 1998 provide for the buyback of MTBs by the government of Pakistan. In this regard, the SBP is has prescribed the procedure for execution of such buyback transactions.
As per procedure, SBP will conduct auctions for the buyback of MTBs on behalf of the Government of Pakistan.
The SBP will announce the details such as security, target amount, auction schedule, etc, and auction result for the buyback of MTBs on Refinitiv, Bloomberg, SBPK pages and on SBP website.
The buyback price of the security will be determined through multiple-price competitive auction process.
All Primary Dealers will be eligible to submit competitive bids in the auctions. Non-competitive bids can also be submitted as per existing instructions.
Eligible participants will required to submit the details of bid price (per Rs 100 of face value) for the buyback up to four decimal and amount of the securities in the auction bidding on Bloomberg Auction Module (AUPD) within the stipulated time:
On settlement date, the bought back securities will be debited from the SGLA of successful bidders while their current accounts will be credited with the accepted price.
Apart from the above, all other auction rules and procedures will apply to the buyback auctions as defined in various auction related circulars.
Copyright Business Recorder, 2024