Oct-Dec: SBP to sell debt instruments worth Rs4.9 trillion

KARACHI:The State Bank of Pakistan (SBP) announced on Thursday that it would sell government-backed long- and short-term debt instruments worth Rs4.9 trillion between October and December this year.A big chunk of the debt, to be raised through the sale of three to 20-year Pakistan Investment Bonds (PIBs) and three to 12-month treasury bills during October-December 2018, would be utilised to pay back the maturing debt of Rs4.449 trillion.After paying the maturing debt, Rs450.20 billion will be left which will add to the overall outstanding debt, which stood at Rs29.861 trillion as on June 30, 2018, according to the SBP.The new debt will help the government to partly bridge the deficit in budgetary financing, which economists fear will be higher than the target of Rs2 trillion for the current fiscal year 2018-19.The central bank will auction the debt instruments to primary dealers who comprise mostly commercial banks.The government, through the central bank, will raise Rs4.60 trillion through six auctions of T-bills from October to December 2018. During the same three-month period, T-bills worth Rs4.40 trillion will mature.Moreover, the government would raise Rs150 billion through the auction of PIBs at a fixed rate of return of 7.25% on three-year bonds, 8% on five-year bonds, 8.75% on 10-year bonds and 10.75% on 20-year bonds, the central bank said.

Apart from this, PIBs valuing at Rs48.34 billion will mature during Oct-Dec 2018.

In addition to this, the government aims to raise another Rs150 billion through the auction of 10-year PIBs at a floating rate.For the first time, the government auctioned PIBs at a floating rate of return worth Rs150 billion in May 2018 that market experts termed a smart and unique move to attract maximum funds.

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