Govt raises Rs3.7bn from bonds

Our Correspondent
Tuesday, Sep 19, 2023

KARACHI: The government raised Rs3.7 billion from the sale of fixed-rate bonds on Monday, significantly below the target of Rs160 billion, as investors sought higher returns amid soaring inflation and a stable policy rate.

The central bank accepted bids for three-, five-, and 10-year bonds. There were no bids for longer-term bonds of 15, 20, or 30 years, according to the auction result.

The cut-off yield on the three-year bond remained the same at 19.3499 percent, while the yield on the five-year bond rose by 100 basis points to 16.95 percent.

The yield on the 10-year bond, which was offered for the first time in a year, was unchanged at 15.2500. The State Bank of Pakistan (SBP) kept its policy rate unchanged at 22 percent last week, citing a declining trend in inflation, which fell from a peak of 38 percent in May to 27.4 percent in August.

The SBP said it expected inflation to ease further in the second half of the fiscal year, despite a sharp rise in global oil prices, which reached $98 per barrel on Monday.