The State Bank of Pakistan (SBP) has announced a buyback auction for Pakistan Investment Bond Floating Rate (PFL) securities worth Rs200 billion, marking a strategic move to manage liquidity and optimize the government’s debt portfolio. The auction, organized by SBP’s Domestic Markets & Monetary Management Department, targets floating-rate PIBs issued between 2019 and 2024, with maturities extending from 2028 to 2029.
The buyback operation is scheduled over a three-day period, starting with the non-competitive auction on November 11, 2025, followed by the competitive auction on November 12. The settlement for the successful bids is set for November 13. This two-stage auction process ensures that both non-competitive and competitive bidders can participate efficiently, while also maintaining transparency in pricing and allocation.
The targeted PFL securities include four issues: PFL-Semi Annual issued on September 21, 2023, with a target of Rs50 billion; the October 19, 2023, issue targeting Rs100 billion; the April 18, 2019, issue targeting Rs50 billion; and the April 18, 2024, issue, with the target amount yet to be specified. Together, these issues sum up to a total buyback target of Rs200 billion.
A PFL buyback is a mechanism through which the SBP repurchases government securities prior to their maturity date. This operation serves multiple purposes. Firstly, it provides immediate liquidity to investors holding these bonds, enabling better cash flow management. Secondly, it allows the government to manage its debt portfolio more effectively, optimizing interest costs and refinancing risk. Thirdly, it supports stability in the secondary debt market, ensuring orderly price formation and market confidence.
The SBP will invite bids for the buyback through its electronic trading system, PRISM+, which facilitates efficient processing and allocation of bids. Investors are required to submit non-competitive bids initially, followed by competitive bids, with the central bank reserving the right to reject any bid without providing justification.
Market analysts note that the floating-rate nature of these PIBs makes them particularly attractive for this buyback operation, as interest payments adjust with prevailing market rates. By targeting PFL securities with maturities stretching into 2028 and 2029, the SBP is not only managing immediate liquidity needs but also ensuring long-term stability in Pakistan’s government debt portfolio.
The buyback initiative is part of SBP’s broader strategy to maintain orderly market operations, enhance investor confidence, and leverage digital platforms for secure and transparent transactions. It reflects the central bank’s proactive approach to debt and liquidity management while supporting the growth of Pakistan’s financial markets.
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