Govt raises Rs26.4bn through PIBs.

KARACHI -- The government on Wednesday could only raise Rs26.4 billion through the Pakistan Investment Bonds (PIBs) against the target of Rs100bn, as investors sought higher returns.

The State Bank's data showed that the government accepted the highest amount of Rs25 billion for three-year PIBs while it accepted only Rs75 million for the five-year tenor. The bids for the benchmark 10-year PIBs were the highest, at Rs122.8bn.

A PIB is a certificate representing a loan to the federal government that matures in three, five, 10, 15, 20 or 30 years. In contrast, the short-term Treasury bill matures in three, six or 12 months. Because these certificates carry the full backing of the government, they are viewed as the safest investment.

In Wednesday's PIBs auction, bids for the 10-year tenor were rejected, whereas no bids were offered for 15, 20 and 30 years.

The three-year tenor was sold at a cut-off yield of 18.05 per cent and the five-year tenor at 13.8pc.

The government has made massive borrowing through PIBs over the past...

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