The State Bank of Pakistan (SBP) on Thursday successfully raised Rs550.97 billion through the auction of Pakistan Investment Bonds (PIBs) under the fixed-rate category, reflecting strong participation from market players across multiple maturities. The settlement of the auctioned instruments is scheduled for February 9, underscoring continued liquidity activity within Pakistan’s domestic debt market.
The auction witnessed robust demand, with total bids amounting to Rs1.745 trillion on a face value basis. This level of participation signals sustained investor interest in government securities, particularly at a time when yield movements and monetary policy expectations remain key considerations for banks and institutional investors. Demand was recorded across all offered tenors, indicating a broad-based appetite for fixed-income instruments with varying maturity profiles.
Among the tenors offered, the highest interest was observed in the 15-year zero-coupon PIB, which attracted bids worth Rs811.50 billion. This was followed by the 5-year PIB, which received bids totaling Rs364.35 billion, and the 3-year PIB, with bids amounting to Rs295.98 billion. The strong demand for longer-duration instruments suggests that investors are positioning for yield stability and long-term returns, despite uncertainties surrounding inflation and interest rate trajectories.
Other tenors also saw meaningful participation. Bids for the 2-year zero-coupon PIB stood at Rs140.0 billion, while the 10-year PIB attracted bids worth Rs132.75 billion. The distribution of bids across short, medium, and long-term maturities highlights diversified investment strategies among market participants, including commercial banks and other institutional investors.
On the acceptance side, the central bank accepted Rs501.35 billion through competitive bidding. When combined with non-competitive bids and short selling, total acceptance reached Rs550.97 billion on a face value basis. This acceptance level reflects SBP’s calibrated approach to borrowing, balancing fiscal financing needs with market conditions and cost considerations.
The highest acceptance was recorded in the 5-year PIB, where total acceptance amounted to Rs217.77 billion. This was followed by the 3-year PIB, with acceptance of Rs170.30 billion, indicating a preference for medium-term instruments within the government’s debt profile. Acceptance for the 10-year PIB came in at Rs61.65 billion, while the 15-year zero-coupon PIB saw acceptance of Rs53.0 billion. The 2-year zero-coupon PIB recorded total acceptance of Rs48.26 billion.
Yield outcomes across maturities reflected a varied but upward-sloping curve. The 2-year zero-coupon PIB was cut off at a price of 82.6944, translating into a cut-off yield of 10.3380 percent. For the 3-year PIB, the cut-off price was set at 99.9875, corresponding to a yield of 10.2489 percent. The 5-year PIB cleared at a cut-off price of 99.0459, offering a yield of 10.7500 percent.
At the longer end of the curve, the 10-year PIB was cut off at a price of 98.5736, resulting in a yield of 11.2390 percent. The 15-year zero-coupon PIB cleared at a cut-off price of 19.6846, with a cut-off yield of 11.4998 percent. These yields highlight the premium demanded by investors for longer-term exposure amid evolving macroeconomic expectations.
Overall, the auction results underscore continued depth in Pakistan’s government securities market and the central bank’s ability to mobilize significant financing through market-based instruments. For the banking sector, the outcome provides insight into yield benchmarks, liquidity management trends, and investor sentiment as the domestic financial system navigates changing economic conditions.
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