KARACHI, Pakistan — Pakistan has set a Rs4.9 trillion target to raise funds through government securities auctions in the January-March 2026 quarter, according to the latest Market Treasury Bills (MTB) auction calendar and a separate Pakistan Investment Bonds (PIB) auction target schedule issued by the State Bank of Pakistan (SBP), Jan. 3, 2026.
The SBP borrowing plan landed as the central bank injected Rs13.548 trillion into the banking system on Friday to keep short-term funding markets liquid — a combined operation that included conventional reverse repos and Shariah-compliant instruments, based on SBP’s official reverse-repo OMO results and the Shariah-compliant OMO injection outcome.
SBP borrowing plan: where the Rs4.9 trillion target comes from
Under the SBP borrowing plan, the government’s auction targets add up to Rs4.9 trillion for the quarter, split across short-term bills and longer-dated bonds:
MTBs: Rs3.25 trillion targeted across six auctions from Jan. 7 to March 16, versus Rs3.589 trillion of maturities falling due in the same period.
Fixed-rate PIBs: Rs1.35 trillion targeted in three auctions (Jan. 14, Feb. 6 and March 11), with issuance spanning five tenors (2-, 3-, 5-, 10- and 15-year).
Floating-rate PIBs (10-year, semi-annual): Rs300 billion targeted via six auctions scheduled from Jan. 7 to March 16.
The SBP borrowing plan is a gross auction roadmap, and the net outcome will depend on cutoffs, participation, and whether the government adjusts targets in response to cash needs and market demand.
Liquidity: Rs13.5 trillion injection, and what it signals
The central bank’s latest liquidity support was led by a conventional reverse-repo injection of Rs12.99 trillion in face value at a 10.51% accepted rate of return for 7- and 14-day tenors, SBP data show. The Shariah-compliant Mudarabah-based operation added Rs558 billion in accepted face value at 10.55% (7-day) and 10.54% (14-day).
Large, short-tenor injections typically reflect tight liquidity conditions in the interbank market — often amplified when government financing and debt rollovers absorb bank funds. That backdrop matters because the SBP borrowing plan relies heavily on frequent MTB auctions, keeping the market sensitive to shifts in liquidity and demand.
Continuity: borrowing targets stay big as financing shifts toward banks
The latest SBP borrowing plan follows a familiar pattern of sizable quarterly auction targets. In July 2025, the central bank announced a similar calendar targeting Rs4.875 trillion for the July-September quarter, also centered on MTBs and PIBs, as detailed in an earlier report, Govt plans Rs4.9tr borrowing.
At the same time, the government has been trying to reduce direct reliance on the central bank while leaning more on commercial banks. In the first five months of FY26, Islamabad retired Rs877.23 billion in SBP debt, a shift that analysts have linked to legal and policy constraints on central bank lending, according to Profit by Pakistan Today’s December report.
For markets, the key test will be execution: whether the SBP borrowing plan proceeds without pushing rates higher, and whether repeat liquidity injections remain a feature of the quarter as auctions, maturities and fiscal cash flows collide.
