SBP raises Rs1.172tr in debt auctions

Gold gains Rs1,200 per tola despite global dip; rupee inches up

KARACHI:

The State Bank of Pakistan (SBP) raised a combined Rs1.172 trillion through its latest treasury bill and Pakistan Investment Bond (PIB) floater auctions, surpassing the Rs1.1 trillion aggregate target as robust bidding, totalling more than Rs2.45 trillion, drove a slight easing of yields and underscored investor confidence in a steady monetary policy landscape.

The T-bill auction alone fetched Rs981 billion against a Rs1,000 billion goal, with cut-off yields dipping up to four basis points (bps) to 10.85% on one-month paper, while 10-year PIB floaters pulled in Rs191 billion out of bids of Rs523 billion, pricing at 95.5 for an implied 11.69% rate. This windfall, amid easing inflation and pre-monetary policy anticipation, bolsters government funding while hinting at potential rate-cut tailwinds for the December 15 review.

The T-bill auction drew Rs1,925 billion in bids, nearly double the target, leading to 89% acceptance for three-month paper. Yields softened modestly – for one-month at 10.85% (down 4 bps) and three-month at 10.90% (down 1 bps) while six-month return stood steady at 11%, with a weighted average of 11.24%. Secondary market yields aligned closely, reflecting liquidity surplus.

For PIB floaters, the 10-year bond saw 523% oversubscription, resulting in tightening of spreads to 0.79% from 0.80%.

Furthermore, the Pakistani rupee appreciated 0.01% against the US dollar in the inter-bank market, closing at 280.37 after gaining Rs0.03 from Tuesday's settlement at 280.40.

Gold prices in Pakistan increased despite a dip in international markets as investors booked profits ahead of the US Federal Reserve's rate decision. Domestic demand and market sentiment kept local bullion prices elevated.

According to the All-Pakistan Gems and Jewellers Sarafa Association, gold per tola rose by Rs1,200 to Rs443,062, while 10-gram gold increased by Rs1,029 to Rs379,854. On Tuesday, gold had declined by Rs1,900 per tola to Rs441,862. Silver also saw gains, rising by Rs265 to Rs6,367 per tola, the highest to date. Globally, spot gold fell 0.3% to $4,198.28 per ounce, while US gold futures edged down 0.2% to $4,227.40, according to Reuters. Spot silver eased 0.2% to $60.56 per ounce after hitting a record $61.61 earlier.

Adnan Agar, Director at Interactive Commodities, said the market had been consolidating for the past week as traders awaited the Fed decision. "The $4,100 support level is strong and gold has been trading between $4,180 and $4,250. Tonight's (Wednesday's) Fed meeting will set the direction for gold," he explained.

Agar noted that silver continues to hit record highs, suggesting that a potential rally in gold could follow the US policy announcement. Investors are now focused on the rate decision and Chair Jerome Powell's remarks at 12am Pakistan time, which could significantly influence both domestic and international bullion trends.