Govt to borrow Rs6.5tr in 4th quarter

The State Bank of Pakistan (SBP) on Tuesday released its auction target calendars for Pakistan Investment Bonds (PIBs) and Market Treasury Bills (MTBs) for the October-December quarter, outlining a combined borrowing plan of a whopping Rs6.5 trillion to help the government meet its financial needs.

The central bank plans to raise Rs1.25 trillion through fixed-rate PIBs across multiple tenors, including two-year (zero-coupon), three-year (10.50% coupon), five-year (11% coupon), 10-year (11.50% coupon), and 15-year (zero-coupon) securities.

Three auctions are scheduled for October 14 (Rs450 billion), November 5 (Rs400 billion), and December 17 (Rs400 billion). Settlement will occur one day after each auction. Maturing amounts during the quarter total Rs652 billion.

The SBP has lined up Rs900 billion in 10-year floating-rate PIBs – first issued on July 10, 2025 with a semi-annual 10.8974% coupon. The first auction opens on October 1, targeting Rs200 billion, with six more to follow through December 24.

For immediate liquidity, the government will rely on Rs4.35 trillion worth of MTB auctions across one-, three-, six-, and 12-month maturities. Maturing amounts stand at Rs4.605 trillion, while provincial governments are expected to invest Rs600 billion in select auctions. The first MTB auction, set for October 1, targets Rs750 billion.

Moreover, the Pakistani rupee extended its upward momentum against the US dollar in the inter-bank market, appreciating by 0.01%. By the day's close, the currency stood at 281.32, marking an increase of three paisa. A day earlier, the rupee had closed at 281.35.

Meanwhile, gold prices in Pakistan climbed to yet another record high on Tuesday, mirroring the international rally where bullion hovered near historic levels. The surge was driven by mounting concerns over a potential US government shutdown and expectations of Federal Reserve rate cuts following weaker jobs data.

In the domestic market, the price of gold per tola rose by Rs3,178 to settle at Rs406,778, according to the All Pakistan Sarafa Gems and Jewellers Association. The 10-gram rate increased by Rs2,725 to Rs348,746. In contrast, silver prices recorded a decline, slipping by Rs16 to Rs4,776 per tola.

Interactive Commodities Director Adnan Agar noted that international gold prices showed volatility throughout the trading day. "Gold's low was $3,793 and its high was $3,871. Later, the market was trading at $3,846," he said.

It saw a slight increase in the morning, then dipped in the afternoon, hitting its lower side before rebounding. This means it dropped by $90 and then started climbing again, Agar added.