State Bank of Pakistan concluded its latest auction of Market Treasury Bills and the 10‑year Pakistan Investment Bond Floating Rate instruments, collectively securing a substantial Rs772.578 billion. The central bank’s regular debt instrument auction attracted significant interest from competitive and non‑competitive bidders, reaffirming the robust functioning of Pakistan’s government securities market. The bulk of funds were raised through various tenors of Market Treasury Bills (MTBs), with additional substantial participation in the long‑term floating rate instruments aimed at diversifying investor participation and managing the yield curve.
In this auction cycle, the State Bank raised Rs677.248 billion through MTBs, which included different maturities from one month to 12 months. These treasury bills are short‑term government securities that play a key role in managing liquidity in the banking system and provide investors with a secure avenue for short‑term investment. Alongside this, an additional Rs95.33 billion was mobilized through the 10‑year Pakistan Investment Bond – Floating Rate (PFL), which provides a longer‑term investment option with yields that adjust periodically, making it attractive for investors seeking protection against interest rate risk.
Analysis of the participation across tenors revealed that the 1‑month MTB bucket attracted the largest share of bids, with face value bids totaling Rs504.737 billion. This strong interest in the shortest maturity reflects investors’ preference for liquidity and flexibility in an environment where interest rate expectations and market conditions remain dynamic. It was followed by substantial bids in the 12‑month category, which drew Rs406.834 billion in bids, indicating confidence among investors seeking longer short‑term maturities. Other maturities also saw healthy participation, with the 3‑month instruments attracting Rs240.47 billion and the 6‑month papers receiving bids worth Rs112.5 billion.
The yield outcomes for the accepted bids provide insights into prevailing short‑term interest rates. The cut‑off yield on the 1‑month MTB settled at 10.1482 percent, reflecting the return investors are willing to accept for the shortest maturity. Yields climbed modestly for longer MTB tenors, with the 3‑month rate at 10.2853 percent, the 6‑month yield at 10.4437 percent, and the 12‑month at 10.5996 percent. These yield levels are an important barometer for the broader financial market, often influencing funding costs and pricing benchmarks for other financial instruments.
Breaking down the Rs677.248 billion raised through MTBs further, data from the central bank shows that Rs319.782 billion was secured via competitive bids, where investors submit bids based on the yield they are willing to accept. A slightly larger portion, Rs357.466 billion, was accepted through non‑competitive bids, which allow investors to participate without specifying a yield, instead receiving the weighted average cut‑off yield. Notably, provincial government entities accounted for a significant Rs300 billion of the non‑competitive bids, entirely in the 3‑month tenor, highlighting active participation by sub‑national public sector entities in the short‑term debt market.
For the long‑term segment, the 10‑year Pakistan Investment Bond – Floating Rate auction also saw strong competitive interest, with Rs423 billion worth of competitive bids submitted. From this pool, the State Bank accepted Rs92.5 billion at a cut‑off price of 96.7179 against the quoted price range of 97.1251 to 94.4296. Additionally, Rs2.83 billion was accepted in non‑competitive bids, bringing the total raised in the 10‑year PFL to Rs95.33 billion. The pricing and acceptance level in the PFL segment suggest balanced demand for longer duration government instruments among institutional investors seeking stable, rate‑adjusted returns.
Overall, the latest auction by the State Bank of Pakistan underscores continued engagement in government securities by both short‑term and long‑term investors, contributing to effective public debt management and liquidity conditions in the financial system. The results also reflect an ongoing interplay of investor preferences across tenors, with implications for interest rate expectations and portfolio strategies within Pakistan’s debt capital markets.
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