KARACHI, Oct 29: The State Bank on Monday conveniently raised Rs12.2 billion for the government by selling 10-year Pakistan Investment Bonds.

Senior bankers said the SBP sold Rs11.9 billion worth of PIBs at a cut-off premium of Rs102.5 per every hundred rupees to mop up Rs12.2 billion.

They said the scripless bonds sold on a premium due to a 2 per cent cut in the State Bank discount rate announced on October 20.

“The cut-off yield works out to be 12.6 per cent against the fixed coupon rate of 13 per cent,” said treasurer of a state-run bank.

Since the SBP had lowered its discount rate from 12 to 10 per cent after announcing the schedule for the auction of the bonds some primary dealers had sold them in the secondary market. The sale was transacted at “when issued price.” Bankers said a large semi- privatized bank alone had sold about Rs1 billion worth of PIBs under this arrangement at 12.25 per cent. They said as the bonds fetched a better price on Monday the bank concerned would lose at least Rs 20 million in this transaction.