The State Bank of Pakistan (SBP) has raised Rs571.76 billion in its most recent auction of Pakistan Investment Bonds (PIBs), conducted on June 18, 2025. This auction drew substantial investor attention, reflecting strong market confidence in government-backed securities despite prevailing economic challenges.
A total of Rs1.217 trillion was offered by SBP, out of which Rs571.76 billion was accepted, showcasing a selective approach toward meeting fiscal needs while managing yields and liquidity in the market. The auction featured bonds of various maturities including 2-year, 3-year, 5-year, 10-year, and 15-year tenors.
The cut-off yields were fixed at 11.39 percent for the 2-year bond, 11.40 percent for the 3-year, 11.70 percent for the 5-year, 12.49 percent for the 10-year, and 12.70 percent for the 15-year bond. These yields indicate the SBP’s strategy to maintain investor engagement while keeping borrowing costs aligned with the central bank’s monetary policy stance.
Investor participation was notably strong across all tenors. For the 2-year bond, bids worth Rs276.03 billion were received, with Rs63.14 billion accepted. The 3-year bond saw Rs188 billion in bids, with Rs37.01 billion accepted. The 5-year bond had a bid volume of Rs375.49 billion, out of which Rs130.43 billion was accepted. Similarly, the 10-year bond attracted Rs87.07 billion in bids with Rs38.2 billion accepted. The most significant participation came in the 15-year bond, where Rs290.5 billion was bid and Rs288 billion was accepted, indicating high investor interest in long-term government securities.
This auction outcome underscores a clear preference among investors for long-dated instruments, possibly signaling expectations of stable interest rates or moderate inflation in the medium term. The acceptance of a large portion of 15-year bonds suggests that market participants are locking in returns over a longer horizon, taking advantage of relatively attractive yields.
The SBP’s selective acceptance of bids highlights a cautious yet strategic approach in managing public debt. By not accepting the full offer amount, the central bank has managed to maintain control over market liquidity while ensuring that government financing needs are met efficiently.
The recent auction also reflects the central bank’s broader debt management policy, which aims to diversify funding sources, extend the maturity profile of public debt, and reduce rollover risks. The presence of consistent demand across maturities shows that government securities continue to be viewed as a reliable investment by the financial sector.
As Pakistan continues to navigate complex fiscal and macroeconomic conditions, the performance of government bond auctions will remain a key indicator of investor sentiment and monetary stability. The SBP is expected to continue monitoring inflation, exchange rates, and fiscal developments closely, with further auctions likely in the coming months to support the financing strategy.
Overall, the successful outcome of this PIB auction points to a healthy appetite for fixed-income instruments in Pakistan’s financial markets, reaffirming confidence in government policy and the SBP’s market operations.