The federal government has successfully raised Rs1.22 trillion by auctioning Treasury bills (T-bills) and Pakistan Investment Bonds (PIBs). The State Bank of Pakistan reported strong demand, receiving bids worth Rs1.73 trillion for T-bills and Rs1.59 trillion for PIBs. This reflects growing investor interest amid uncertain economic conditions.
In the latest T-bill auction, the government accepted Rs965 billion, well above the target of Rs850 billion. The maturity amount stood at Rs821 billion. However, the PIB auction raised only Rs261 billion against a target of Rs400 billion, despite high demand.
Analysts are concerned that this increasing investment in government securities may slow down credit flow to the private sector. Private sector borrowing has significantly declined since December 2024. This trend highlights banks’ preference for safer government debt over riskier private loans.
Additionally, the cut-off yield for one-month T-bills dropped to 12.32%, while rates for longer-term papers remained stable. Economists warn that focusing too much on government securities could hinder private sector growth, limiting overall economic recovery in the country.