Govt raises Rs1.22 trillion via T-bills and bonds auction
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The federal government has raised Rs1.22 trillion through the auction of Treasury bills (T-bills) and Pakistan Investment Bonds (PIBs), according to data released by the State Bank of Pakistan.
The central bank reported receiving bids worth Rs1.73 trillion for T-bills and Rs1.59 trillion for PIBs, reflecting strong investor demand for government securities amid uncertain economic conditions.
The government accepted Rs965 billion in the latest T-bill auction against a target of Rs850 billion, while the maturity amount stood at Rs821 billion.
In contrast, the government raised Rs261 billion through PIBs, against a target of Rs400 billion, despite receiving Rs1.59 trillion in bids.
Analysts expressed concern that the rising investment in risk-free government papers is reducing the flow of credit to the private sector, potentially slowing down industrial and commercial activity.
Since December 2024, private sector borrowing has witnessed a notable decline, underlining banks' preference for safer government debt.
The cut-off yield for one-month T-bills fell by 6 basis points to 12.32%, while rates for 3, 6, and 12-month papers remained steady.
Economists warn that excessive focus on non-productive government securities may hinder private sector growth, limiting prospects for broader economic recovery.
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