The State Bank of Pakistan (SBP) on Wednesday raised a combined Rs1.02 trillion through auctions of Pakistan Investment Bonds (PIBs) and Market Treasury Bills (MTBs), reflecting continued government reliance on domestic debt markets amid easing yields across all tenors.
According to official auction results released by the central bank, the government mobilised Rs114.48 billion through a 10-year Floating Rate Pakistan Investment Bond carrying a semi-annual coupon. The settlement for this PIB auction is scheduled for December 26, 2025.
The PIB auction attracted strong interest from investors, with total bids amounting to Rs669 billion. Despite the sizeable demand, the government accepted bids worth Rs114.48 billion, signalling a selective borrowing approach. The cut-off price for the accepted bids was fixed at 96.3992, which was also applied to non-competitive bids submitted during the auction.
In addition to the PIB auction, the SBP raised Rs911.22 billion on a face value basis through the auction of Market Treasury Bills. This brought the total amount raised through both auctions to Rs1.02 trillion, underlining the scale of short-term and medium-term financing needs being met through the domestic money market.
The breakdown of the MTB auction showed that the government accepted bids across all available tenors. The largest share of accepted bids came from the 12-month Treasury Bill, followed by the 3-month and 1-month papers, reflecting investor preference for longer maturities amid expectations of further easing in interest rates.
Cut-off yields across all MTB tenors recorded a notable decline compared to the previous auction, indicating improved market sentiment and expectations of a softer interest rate environment. The cut-off yield on the 1-month T-bill declined by 36 basis points to 10.4859 percent, compared with 10.8492 percent in the previous auction.
Similarly, the 3-month Treasury Bill saw its cut-off yield fall by 50 basis points to 10.4878 percent, down from 10.9881 percent earlier. The 6-month T-bill yield also declined sharply, easing by 52 basis points to 10.4799 percent, compared with 10.9999 percent in the preceding auction.
The steepest decline was recorded in the 12-month Treasury Bill, where the cut-off yield dropped by 78 basis points to 10.4880 percent, down from 11.2681 percent previously. This marked reduction in long-term yields suggests growing confidence among investors regarding the inflation outlook and the trajectory of monetary policy.
Market participants view the broad-based decline in yields as a reflection of easing inflationary pressures, improved external balances, and expectations that the central bank may continue to maintain a supportive monetary stance. The sharp fall in the 12-month yield, in particular, indicates that investors are increasingly comfortable locking in funds for longer durations at lower returns.
The successful auctions also demonstrate sustained liquidity in the banking system, enabling the government to meet its financing requirements without significant upward pressure on borrowing costs. Analysts note that moderation in yields can help ease debt servicing pressures and create fiscal space, provided borrowing remains aligned with broader macroeconomic stabilization efforts.
Overall, the latest auction results highlight a shifting dynamic in Pakistan’s domestic debt market, with falling yields across the curve pointing to improving confidence, stable liquidity conditions, and expectations of continued macroeconomic stabilization in the months ahead.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.