The State Bank of Pakistan (SBP) successfully mobilized Rs1.34 trillion through dual auctions of Market Treasury Bills (MTBs) and Pakistan Investment Bonds – Floating Rate (PIB-FR), reflecting sustained liquidity in the banking sector and stable investor sentiment. The auctions come against the backdrop of the central bank’s decision to maintain the benchmark policy rate at 11 percent for the fourth consecutive monetary policy review, signaling a cautious yet steady approach to monetary tightening.
According to auction data released by the SBP, total bids worth Rs2.13 trillion were received for 1-month, 3-month, 6-month, and 12-month T-bills. Out of this, the central bank accepted Rs1.13 trillion in face value, including non-competitive bids, with a realized value of Rs1.06 trillion. The auction results showed minimal variations in cut-off yields, reflecting investor confidence in near-term rate stability and a neutral stance on short-term instruments.
The 1-month and 3-month Treasury bills saw slight yield declines of 11 and 0.9 basis points, settling at 11.0003 percent and 11.0489 percent respectively. Meanwhile, the 6-month and 12-month tenors recorded marginal upticks of 0.4 and 10 basis points, closing at 11.0488 percent and 11.3498 percent. The overall mix of modest yield movements indicates that banks and institutional investors are largely rolling over maturing securities rather than repositioning aggressively for higher returns, suggesting expectations of rate stability over the next few quarters.
The data revealed that the bulk of the raised amount came from T-bills, totaling Rs1.13 trillion, which underlines the persistent preference for short-term government paper. The 12-month instrument dominated the auction with over Rs634 billion accepted, signaling a tilt toward slightly longer short-term maturities as investors weigh the likelihood of a gradual easing cycle in 2026.
In parallel, the SBP also conducted an auction for Pakistan Investment Bonds – Floating Rate (10-Year), accepting Rs205.88 billion in face value at a cut-off price of 95.0012, slightly higher than the previous auction’s 94.8505. The modest rise in price represents a subtle improvement in demand for longer-tenor securities, indicating a cautiously optimistic investor sentiment regarding long-term interest rate stability. Total bids for the PIB-FR auction reached Rs1.01 trillion, yet the SBP opted for a conservative acceptance of Rs190 billion in realized value, in line with its liquidity management objectives.
Market analysts suggest that the consistent yields and measured participation across both auctions highlight a stable monetary outlook, with investors largely aligned with the SBP’s stance of maintaining policy continuity. The limited fluctuation in rates implies that the financial system remains flush with liquidity, allowing banks to roll over maturing government securities without pressuring yields upward.
The Rs1.34 trillion mobilization underscores the government’s ongoing reliance on domestic borrowing through market instruments to meet fiscal financing needs while managing inflationary pressures. With interest rates holding steady and inflation showing gradual moderation, the SBP’s auction results affirm market confidence in its policy consistency and liquidity management framework.
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