KARACHI: Investors offered over Rs3tr in bids for treasury bills and Pakistan Investment Bonds (PIBs) in Wednesday’s auction, from which the government raised Rs1.34tr.
The high level of participation underscored banks’ and investors’ continued preference for risk-free government securities, while private-sector credit demand remains subdued.
According to the State Bank of Pakistan (SBP), bids for treasury bills totalled Rs2.132tr, while those for 10-year PIBs stood at Rs1.011tr, taking cumulative offers to Rs3.143tr. Analysts said the trend reflected limited private sector activity and the economy’s reliance on borrowing to bridge fiscal shortfalls.
Economists noted that if such liquidity were channelled towards private enterprises, it could help achieve GDP growth of 5-6pc, needed to generate employment and reduce poverty affecting nearly 97 million people.
Investors offer over Rs3tr as private sector credit remains muted
The government’s appetite for borrowing stems from weak revenue collection. The first-quarter fiscal report showed the Federal Board of Revenue’s receipts falling short of the target by Rs198bn.
The government raised Rs612.2bn from 12-month T-bills at 11.34pc, the highest among all tenors, while bids for this maturity totalled Rs637.8bn. The largest bids of Rs863.2bn were received for one-month papers, of which Rs104.7bn was raised at 11pc. The government also borrowed Rs83bn through three-month papers and Rs81bn from six-month papers, in addition to Rs253.5bn through non-competitive bids.
The auction target for T-bills was Rs950bn, which the government exceeded. Another Rs206bn was raised through floating-rate 10-year PIBs.
Investors’ offer of over Rs1tr for long-term PIBs indicates ample liquidity seeking safe returns. The SBP’s recent report showed that scheduled banks invested about Rs5.8tr in government securities during the first nine months of 2025, underscoring weak private credit growth and slow economic momentum.
While the government has been seeking foreign investment and recently extended incentives to Saudi Arabia for manufacturing projects, actual inflows remain limited. Officials say that despite memoranda of understanding worth billions of dollars, neither Saudi Arabia nor the UAE has made significant investments.
Economists argue that the greater challenge lies in mobilising domestic capital towards productive sectors rather than government debt instruments.
Published in Dawn, October 30th, 2025
