ISLAMABAD (Ahmed Mughal):- The Pakistan’s Govt is ready to further mounting to debt profile of the country as it has plan to raise Rs.4.7 trillion through auctioning of T-bills and bonds in next three months from local money market to meet financial requirements.
The country’s Central Bank has issued quarterly schedule of issuing Treasury bills and Pakistan Market Bonds. The Central Bank wants to raise Rs.4.4 trillion through the Bonds, Rs.350 billion through T-bills during Sept to Nov 2019.
The country’s debt and responsibilities have been swelled to Rs.40 trillion ($250 billion) up to June 2019. Govt Debt to GDP of the country has reached at 82 percent. According to the Debt and responsibilities Act of Pakistan, The Debt to GDP must be below from 60 percent.
Pakistani nation is paying heavy price of this heavy borrowing to meet the cost of public affairs. $1600 Per capital income is showing the power purchasing of the country’s citizens. Every citizen has a liability of public debt almost Rs.0.2 million ($1300).
According to the State Bank of Pakistan, the authorities has plan to raise Rs.4.4 trillion through auctioning of Market Treasury Bill. The SBP will conduct six different auctions by fortnight base of T- bills.
The Bank will auction the T-bills worth of Rs.600B on 11 Sept. It will also sell the bills Rs.1000/1000 on 25 Sept and 9 Oct each. It will also auction bills Rs.600/600bln each on 23 Oct, 6 Nov and 20 Nov 2019.
According to the SBP, the authorities will use Rs.4.2043 trillion for repayment of earlier T-bills as per plan. They will also use Rs.195.7 billion for additional financial requirements.
The maximum maturity date of these bills is one year. The Govt wants to sell these papers for the period of Rs three month, six months and one year.
Pakistan Investment Bonds
The Govt has plan to sell the Pakistan Investment Bond worth of Rs.300 billion during next three month. According to the schedule, the authorities will auction the bonds through three auctions.
The maturity date of these bonds from 3-year to 20-year. The SBP offered profit rate 9 percent for three years bond, 9.5 percent for 5 years. It also offered profit rate Rs.10 percent for 10 years and 11 percent for 20 years maturity period.
The SBP also shows that the authority wants to use Rs.343.951 billion for additional financial requirements. It will also use Rs.6.05 billion out of total amount for repayment of principal and coupon.
The Primary Dealers will take part in auctioning of these T-bills, Bonds. Some selected commercial banks and financial institutions are included in primary dealers.
It is important to mention here that it is not compulsory for the govt to sell all planned papers.