KARACHI: During the upcoming three months of FY24 (August-October), the federal government has devised a plan to borrow Rs 11.09 trillion from the domestic banking system. The auction calendar reflects that most of the funds would be collected by selling short-term government securities.
The funding will be acquired through auctions of different short-term security papers. These include long-term Pakistan Investment Bonds (PIBs) Fixed Rate and PIBs Floating Rate, GoP Ijara Sukuk Fixed Rental Rate (FRR), as well as short-term Government of Pakistan Market Treasury Bills (MTBs).
As per the auction calendar provided by the State Bank of Pakistan (SBP), the majority of the amount will be raised through the sale of short-term government securities. The federal government aims to gather approximately Rs 8.25 trillion by auctioning MTBs during the August to October period of 2024, in contrast to the maturing amount of Rs 8.905 trillion.
To achieve this financing goal, the SBP has planned a total of six MTB auctions in the upcoming three months. Specifically, approximately Rs 2.7 trillion will be acquired in August. Subsequently, Rs 4.2 trillion will follow in September, and ultimately Rs 1.35 trillion in October 2023.
In addition, the federal government intends to borrow Rs 2 trillion through the issuance of long-term security papers. This allocation consists of Rs 480 billion obtained from the sale of PIBs Fixed Rate and Rs 640 billion from PIBs Floating Rate Semi-Annual Auction. Furthermore, the sale of 2-year and 3-year PIBs (Floating Rates) through Quarterly Auctions will yield Rs 880 billion.
Moreover, as outlined in the auction calendar, the federal government is poised to gather Rs 510 billion through the offering of the Government of Pakistan Ijara Sukuk Variable Rental Rate (VRR). Simultaneously, it aims to raise Rs 330 billion by auctioning GOP Ijara Sukuk Fixed Rental Rate (FRR).
