The State Bank of Pakistan (SBP) has raised over Rs654 billion through the latest auction of Pakistan Investment Bonds (PIBs), surpassing its initial target of Rs400 billion. The settlement of this auction is scheduled for September 8, 2025. The outcome underscores continued confidence in the country’s government securities despite an environment of elevated yields and broader macroeconomic challenges.
According to SBP data, the auction attracted significant investor participation, drawing bids worth an impressive Rs28 trillion across five different maturity categories. This overwhelming response highlights the sustained demand for long-term sovereign instruments, a trend driven by both institutional investors and banks seeking reliable fixed-income opportunities.
Out of the total bids received, the central bank accepted Rs638.9 billion in competitive bids along with Rs15.4 billion in non-competitive bids. This brought the total acceptance figure to Rs654.3 billion, comfortably exceeding the government’s initial borrowing plan. The strong uptake reflects efficient market price discovery while balancing the government’s financing needs with investor expectations.
The cut-off yields and weighted average returns varied across maturities, reflecting diverse risk and return profiles for investors. The 2-year zero-coupon PIBs achieved a weighted average yield of 11.16% with a cut-off rate of 11.20%. Meanwhile, the 3-year fixed coupon bonds recorded the lowest yield in this auction, with a weighted average of 11.11% and a cut-off at 11.14%.
For medium-term maturities, 5-year bonds provided an average yield of 11.41% with a cut-off rate of 11.44%. Longer tenures offered progressively higher returns, with the 10-year PIBs averaging 12.01% and a cut-off of 12.04%. The longest 15-year zero-coupon bonds commanded the highest yield at 12.38%, reflecting investors’ risk-adjusted return expectations over extended horizons.
The success of the auction reinforces the credibility of government debt instruments in the eyes of the market. Analysts note that the robust investor appetite, despite higher yields, demonstrates confidence in Pakistan’s repayment ability and the overall stability of its sovereign securities framework. Such auctions also serve as an important tool for the central bank in managing liquidity and shaping the domestic yield curve.
Market observers suggest that the heavy participation in PIBs indicates a preference for long-term fixed-income instruments over more volatile short-term placements, especially given the anticipation of changing interest rate dynamics. For investors, PIBs remain an attractive option, balancing predictable returns with sovereign credit backing.
As Pakistan continues to navigate fiscal and external sector challenges, the ability to raise funds beyond set targets provides crucial support for government financing needs. At the same time, competitive bidding ensures that borrowing costs remain transparent while aligning with market-driven yield expectations.
The auction results highlight not only the depth of Pakistan’s domestic debt market but also the growing sophistication of investor participation across varying maturities.
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