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Express Tribune
5 days ago
- Business
- Express Tribune
FX dips by $7m as SBP plans Rs4.35tr auction
Listen to article The State Bank of Pakistan (SBP) reported a marginal decline in its foreign exchange reserves for the week ending May 30, 2025, with holdings falling by $7 million to $11.5 billion. Total liquid foreign reserves stood at $16.6 billion, including $5.1 billion held by commercial banks. The slight dip comes as Pakistan continues to navigate external debt repayments and manage its current account as the country relies on inflows from multilateral institutions and overseas remittances to strengthen its external sector. As part of its liquidity management, the SBP also released its auction calendar for government securities from June to August 2025, targeting Rs4.35 trillion in borrowing. This includes auctions for Market Treasury Bills (MTBs), fixed-rate Pakistan Investment Bonds (PIBs), and floating-rate PIBs. The total maturing amount for MTBs during this period is Rs3.063 trillion, while the SBP has set a slightly lower auction target of Rs2.85 trillion. The issuance is spread across tenors: Rs750 billion each for 1-month and 3-month papers, Rs625 billion for 6-month, and Rs725 billion for 12-month instruments. For longer-term financing, the SBP plans to raise Rs900 billion via fixed-rate PIBs — Rs300 billion for 2-year bonds and Rs150 billion each for 3-, 5-, 10-, and 15-year tenors. An additional Rs600 billion will be raised through 10-year floating-rate PIBs. The grand total of all planned auctions stands at Rs4.35 trillion, reflecting the government's financing requirements and the SBP's liquidity management strategy. Meanwhile, domestic bullion prices surged on Thursday, tracking international market gains driven by safe-haven demand. However, gains in gold were later pared after news of a phone conversation between Chinese President Xi Jinping and US President Donald Trump signalled a possible thaw in trade tensions. The price of 24-karat gold rose by Rs4,300 per tola to Rs358,400, according to the All-Pakistan Gems and Jewellers Sarafa Association. Ten-gram gold rose by Rs3,687 to Rs307,270. The metal had remained flat a day earlier at Rs354,100 per tola. Silver also gained strongly, hitting a 13-year global high as it crossed $35 per ounce. In the local market, silver prices rose by Rs159 to Rs3,745 per tola. Adnan Agar, Director at Interactive Commodities, said gold traded between $3,360 and $3,403 globally. "Tomorrow's US non-farm payroll data will be key in setting gold's direction," he noted, adding that "The Xi-Trump call has sparked speculation about easing trade tensions. Trump is expected to hold a press conference in the next few hours. If there's any positive announcement, gold could ease further." The rupee also posted a mild gain, appreciating by 0.02% to close at 282.17 against the US dollar, up five paisas from the previous day.
Business Recorder
15-05-2025
- Business
- Business Recorder
90bps drop in Market Treasury Bills yield
KARACHI: The margin on short-term government securities declined by up to 90 basis points (bps) in the Treasury Bills (T-bills) auction held on Wednesday, reflecting market reaction to the recent monetary policy easing. On behalf of the federal government, the State Bank of Pakistan (SBP) invited tenders for the sale of 1-month, 3-month, 6-month, and 12-month Government of Pakistan Market Treasury Bills (MTBs) through primary dealers on May 14, 2025, with settlement scheduled for May 15, 2025. The auction witnessed robust participation by the primary dealers, with total bids amounting to Rs 1.987 trillion. The highest interest was observed in the 1-month T-bills, attracting bids worth Rs 667.6 billion. Bids for other tenors included Rs 453.55 billion for 3-month, Rs 225.15 billion for 6-month, and Rs 641.6 billion for 12-month MTBs. Rate cut fallout: Foreign investment in T-Bills takes a hit The federal government accepted bids worth Rs 664 billion, including Rs 102 billion in non-competitive bids, exceeding the auction target of Rs 550 billion, but falling short of the maturing amount of Rs 716 billion. The cut-off Yields on different bonds decreased by 66-90bps, with the current yields standing at 11.25 percent for the 1-month T-Bill, 11.24 percent for the 3-month, 11.28 percent for the 6-month MTBs, and 11.35 percent for the 12-month T-Bill. The decline in yields is largely attributed to the 100-bps cut in the SBP's policy rate announced earlier this month by the Monetary Policy Committee. This policy shift has led to improved investor sentiment and expectations of further monetary easing. Copyright Business Recorder, 2025
Business Recorder
15-05-2025
- Business
- Business Recorder
90bps drop in MTBs yield
KARACHI: The margin on short-term government securities declined by up to 90 basis points (bps) in the Treasury Bills (T-bills) auction held on Wednesday, reflecting market reaction to the recent monetary policy easing. On behalf of the federal government, the State Bank of Pakistan (SBP) invited tenders for the sale of 1-month, 3-month, 6-month, and 12-month Government of Pakistan Market Treasury Bills (MTBs) through primary dealers on May 14, 2025, with settlement scheduled for May 15, 2025. The auction witnessed robust participation by the primary dealers, with total bids amounting to Rs 1.987 trillion. The highest interest was observed in the 1-month T-bills, attracting bids worth Rs 667.6 billion. Bids for other tenors included Rs 453.55 billion for 3-month, Rs 225.15 billion for 6-month, and Rs 641.6 billion for 12-month MTBs. Rate cut fallout: Foreign investment in T-Bills takes a hit The federal government accepted bids worth Rs 664 billion, including Rs 102 billion in non-competitive bids, exceeding the auction target of Rs 550 billion, but falling short of the maturing amount of Rs 716 billion. The cut-off Yields on different bonds decreased by 66-90bps, with the current yields standing at 11.25 percent for the 1-month T-Bill, 11.24 percent for the 3-month, 11.28 percent for the 6-month MTBs, and 11.35 percent for the 12-month T-Bill. The decline in yields is largely attributed to the 100-bps cut in the SBP's policy rate announced earlier this month by the Monetary Policy Committee. This policy shift has led to improved investor sentiment and expectations of further monetary easing. Copyright Business Recorder, 2025
Express Tribune
26-03-2025
- Business
- Express Tribune
Govt borrows Rs1.67tr via T-bills
Over half of the fresh borrowing in the education sector was done by the higher education sector. PHOTO: FILE Listen to article The government has borrowed Rs1.67 trillion from private banks and other institutions in its latest treasury bill auctions. The State Bank of Pakistan (SBP) raised Rs1.67 trillion through auctions for Pakistan Investment Bonds (PIBs) and Market Treasury Bills (MTBs) held on March 26, 2025, with settlement scheduled for April 3, 2025. The PIB auction received total bids of Rs1,132.5 billion, with accepted bids amounting to Rs980.505 billion, including Rs972 billion in competitive bids and Rs8.505 billion in non-competitive bids. Notably, all bids for 2-year PIBs were rejected, while the 5-year tenor attracted Rs16.903 billion at a cut-off price of 96.8291. The 10-year PIBs dominated the auction, with Rs963.602 billion accepted at a cut-off price of 92.6071. In the MTB auction, the SBP received bids worth Rs1,084.95 billion, accepting Rs689.768 billion, comprising Rs609.95 billion in competitive bids and Rs29.818 billion in non-competitive bids. The 1-month MTBs recorded the highest cut-off yield at 12.3898%, followed by 3-month and 12-month tenors at 12.0100%, while the 6-month MTBs closed at 11.9999%. The weighted average yields ranged between 11.8256% and 12.2483%, reflecting stable investor sentiment across short- to medium-term tenors. The results highlight strong demand for government securities, particularly longer-dated PIBs, signalling the banking sector's reliance on government borrowing. Meanwhile, the SBP has been actively intervening in the interbank foreign exchange (FX) market over the past several months, with interventions fluctuating between $536 million and $1,151 million. According to data from Topline Research and the SBP, FX interventions stood at $573 million in June 2024, rising to $722 million in July before dropping to $569 million in August. A significant increase was observed in September, with interventions reaching $946 million, followed by further hikes to $1,026 million in October and a peak of $1,151 million in November. By December, interventions declined to $536 million. These interventions are often criticised for keeping the dollar high, benefiting exporters while limiting potential rupee appreciation. Without these purchases, the rupee could have been stronger against the greenback. The Pakistani rupee recorded a slight gain against the US dollar, appreciating 0.06% in the interbank market on Wednesday. By the close of trading, the currency stood at 280.26, marking an increase of 16 paisa from the previous day's 280.42. Meanwhile, gold prices in Pakistan remained stable on Wednesday, with the precious metal selling at Rs317,800 per tola, unchanged from the previous session, according to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). This stability followed a Rs800 per tola decline on Tuesday. The global gold market also remained steady, with international rates holding at $3,021 per ounce, as per APGJSA. Adnan Agar, Director at Interactive Commodities, noted that the gold market remains lacklustre, confined to a narrow trading range of $3,005 to $3,035 per ounce. He attributed this stagnation to the absence of major economic data from the US and ongoing uncertainty regarding tariffs and geopolitical tensions between Russia and Ukraine.
