Revenue: Govt to raise Rs2.27t through sale of T-bills, says SBP

Another Rs300b to be raised through Pakistan Investment Bonds.


Our Correspondent April 01, 2014
The SBP has asked primary dealers to bid for PIBs on April 23, May 21 and June 18 through the Bloomberg Online Auction module. PHOTO: FILE

KARACHI:


The government plans to raise Rs2.27 trillion through the sale of three, six and 12-month market treasury bills in the fourth quarter of 2013-14, the State Bank of Pakistan (SBP) said on Tuesday.


The SBP’s Domestic Markets and Monetary Management department will invite bids seven times during April-June from primary dealers, which are selected financial institutions, through the Bloomberg Online Auction module.

These auctions will take place on April 2, April 16, April 30, May 14, May 28, June 11 and June 25. The maturing amount during the quarter is Rs2.21 trillion while the government will raise Rs56.06 billion to meet additional requirements.

Separately, the government also intends to raise Rs300 billion through three, five, 10 and 20-year Pakistan Investment Bonds (PIBs) in the fourth quarter of 2013-14.

The SBP has asked primary dealers to bid for PIBs on April 23, May 21 and June 18 through the Bloomberg Online Auction module. The primary dealers will be required to deposit the amount of accepted bids to the chief manager of the SBP’s Banking Services Corporation on auction settlement dates.

The maturing amount during the quarter is Rs31.89 billion while the government will raise Rs268.1 to meet additional requirements through PIBs.

The government has shifted its focus away from market treasury bills and towards long-term PIBs in recent months. This has resulted in a windfall for the banking sector, which benefitted from massive PIB issuance last month with expanding net interest margins (NIMs).

According to KASB Securities research analyst Farrukh Karim, the yield on PIBs is currently more than 200 basis points higher than that offered by market treasury bills.

“By opting for PIBs as opposed to lending (to the private sector), banks are enhancing NIMs as well as curtailing potential nonperforming loans’ accretion, which is a significant positive for the sector,” said Karim.

Published in The Express Tribune, April 2nd, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

COMMENTS

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ