RECORDER REPORT

KARACHI: The federal government Wednesday borrowed over Rs 40 billion through the auction for long-term government bonds.

The auction for Pakistan Investment Bonds (PIBs) for 3-, 5-, 10- and 20-year maturity was held on May 17, 2017 and overall, the State Bank of Pakistan (SBP) received bids worth Rs 81.683 billion with a realized amount of Rs 85.486 billion. Most of the bids were received for 3-year papers, which fetched Rs 55 billion.

Out of total received bids, the federal government accepted bids amounting to Rs 38.925 billion with a realized value of Rs 40.663 billion through the auction for 3-, 5- and 10-year long-term bonds. However, the federal government rejected all the bids for 20-year papers. The tentative target for this auction was Rs 50 billion.

The government largely borrows through the sale of 3-year bonds. A cut-off yield of 6.4060 percent was set for 3-year bonds against the sale of some Rs 34.589 billion (realized amount) PIBS.

An amount of Rs 5.529 billion (realized amount) was raised through the sale of 5-year long-term investment bond at a 6.8974 percent.

Similarly, some Rs 543.77 million were borrowed against the sale of 10-yerar bonds at 7.9358 percent.