SBP releases auction calendar for PIBs, MTBs

Amount to Rs1.13t, will be held in November-January.

KARACHI: The State Bank of Pakistan (SBP) will hold auctions for Pakistan Investment Bonds (PIBs) and market treasury bills (MTBs) of different maturities amounting to a total of Rs1.13 trillion in November-January.

According to the auction calendar released by the SBP on Thursday, the government will raise Rs980 billion via six MTB auctions in November-January. Two auctions will take place in November, December and January each.

The MTB target for each auction ranges from a maximum of Rs260 billion (to be held in November) to a minimum of Rs75 billion (to be held on December 24).

The government aims to borrow a total of Rs150 billion in November-January through PIBs of three, five, 10 and 20 years of maturity. The target for the three auctions -- to be held in November and December – is Rs50 billion each.

Meanwhile, the government raised a little over Rs285.7 billion in the first MTB auction of November on Wednesday against the target of Rs260 billion. Indicating their expectation of a downward revision in the discount rate in the upcoming monetary policy, banks invested Rs127 billion and Rs122.1 billion in the 12-month and six-month bills, respectively.

In contrast, their investment amounted to only Rs36.6 billion in the three-month papers, which reflects their strategy to lock in higher interest rates before the expected monetary easing. A majority of analysts expect a downward revision of 50 to 100 basis points in the policy rate in the wake of easing inflationary pressures in recent months.

Published in The Express Tribune, November 14^th, 2014.

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