State Bank to auction T-bills, bonds online

Says the automated system will increase efficiency, cut risk.

KARACHI: The State Bank of Pakistan (SBP) has announced that it will conduct the auction of Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs) online via Bloomberg auction system from February 20.

“This decision has been taken in order to automate and bring more efficiency in the primary auction process, which will not only reduce operational risk in the manual auction process, but will also bring Pakistan on a par with other countries that have already implemented an automated electronic auction system,” the SBP said in a press release on Thursday.

The central bank said the online auction system had been customised to the needs of the market and the process of auction from bid submission to settlement of accepted bids had been completely automated.

The bid reports of auction will be available on the SBP website after announcement of auction results.

The SBP has issued detailed instructions and guidelines in this regard to the presidents and chief executives of all primary dealers (financial institutions).

In the secondary market, trading in government securities is already being done on the Electronic Bond Trading Platform since January 2010, which has enhanced visibility and price discovery of the securities.

Now, the introduction of automated primary market auction will complement and augment capabilities of the fixed income market, as a liquid and vibrant government securities market provides a strong foundation for the development of debt markets.

Published in The Express Tribune, February 15^th, 2013.

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