SBP raises Rs1.3tr via T-bill, PIB auctions

Gold rises by Rs1,300 to Rs516,062/tola; rupee inches up to 279.57/$

KARACHI:

The State Bank of Pakistan (SBP) on Wednesday raised over Rs1.31 trillion through auctions of short-term treasury bills and long-term floating-rate Pakistan Investment Bonds (PIBs), reflecting continued government reliance on domestic debt markets to finance budgetary needs.

According to the central bank, the government accepted Rs1.21 trillion against bids exceeding Rs1.26 trillion in the auction of Market Treasury Bills (MTBs) with settlement on February 19. Separately, the SBP raised Rs95.33 billion in the auction of 10-year floating-rate Pakistan Investment Bonds (PFL).

In the MTB auction, the largest acceptance came in the 12-month tenor, where Rs406.83 billion in face value bids translated into a realised amount of Rs367.66 billion. The three-month tenor saw Rs240.47 billion bids with Rs234.87 billion realised, followed by Rs112.5 billion bids for six-month paper (Rs106.87 billion realised) and Rs504.74 billion bids for one-month bills (Rs501.06 billion realised).

Cut-off yields showed a slightly upward slope across different maturities, with 12-month MTBs accepted at 10.5996%, compared with 10.4437% for six-month, 10.2853% for three-month and 10.1482% for one-month securities.

In the long-term segment, the SBP accepted Rs95.33 billion (face value) in the 10-year floating-rate PIB auction, including Rs2.83 billion non-competitive bids. The competitive portion amounted to Rs92.5 billion at a cut-off price of 96.7179 with a realised value of Rs89.54 billion.

Furthermore, the Pakistani rupee inched up 0.01% in the inter-bank market to close at 279.57 against the US dollar, strengthening by Rs0.03 from Tuesday's 279.60, according to the SBP.

Meanwhile, gold prices in Pakistan rose, tracking a sharp recovery in the international market where bullion gained more than 2% as investors weighed geopolitical tensions and awaited the US Federal Reserve's January meeting minutes.

Locally, gold per tola increased by Rs1,300 to Rs516,062, while 10-gram gold was sold at Rs442,439, up Rs1,114, according to the All-Pakistan Gems and Jewellers Sarafa Association. Silver also edged higher, rising Rs32 to Rs8,046 per tola. On Tuesday, gold had fallen sharply, with per-tola prices dropping Rs9,000 to Rs514,762.

Interactive Commodities Director Adnan Agar said the market was reacting to renewed fears of a US strike following stalled Iran-US negotiations. "Gold, silver, and platinum were all up due to reports suggesting the US may launch an attack in the coming days," he noted.

Agar added that if conflict escalates, gold could reach record highs, while calm could trigger a downward correction.

Internationally, spot gold climbed 2.6% to $5,003.85 per ounce by 11:36 am ET, rebounding from a one-week low of $4,841.74 on Tuesday. Analysts are closely monitoring developments in the Middle East, the Fed's minutes, and upcoming US economic data, including December's PCE report, which could further influence gold and silver prices.