Karachi: According to news reports, the State Bank of Pakistan (SBP) declared on Monday (November 29) that the sale of Pakistan Investment Bonds (PIBs) generated PKR 117 billion. Against a target of PKR 100 billion, the central bank got offers totaling PKR 288 billion.
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According to sources, the increased investment in PIB came after the central bank raised interest rates by 150 basis points to 8.75 percent in the last week of November. The market expects a further rise in interest rates in the next months, therefore investor bids are greater.
In addition, the government increased the 3-year PIB cut-off yield by 246 basis points to 11.34 percent, raising PKR 25 billion in total. While the 5-year paper’s cut-off yield was hiked by 241 basis points to 11.59 percent, raising PKR 56.45 billion.
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Similarly, the PIB policy rate was raised by 196 basis points to 11.79 percent for a ten-year period, raising PKR 35.5 billion. The central bank also stated that the adjustment in monetary policy was prompted by the economy’s unusual conditions as a result of the outbreak. The policy shift is aimed at allowing the economy enough breathing room to absorb the shock and lessening the impact on the general public.
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