KARACHI, Jan 29: The State Bank of Pakistan has increased the cut-off yield on all tenures of Pakistan Investment Bonds, reflecting a change under rising inflationary pressure on economy.

The SBP significantly increased the cut-off yield on benchmark 10-year PIBs from 10.21 per cent to 10.85 per cent on Thursday.

The SBP sold PIBs less than the target of Rs20 billion and remained limited to realise only Rs10.822 billion.

The long-term bonds of 30 and 20 years also witnessed an increase of about 50 basis points.

The SBP increased the 20-year PIBs cut-off yield to 11.94 per cent from 11.41 per cent. Similarly, the cut-off yield of 30-year PIBs rose to 12.11 per cent from 11.61 per cent.

The SBP increased the cut-off yield on 15-year bonds to 11.74 per cent from 11.15 per cent. Similarly, yield on five and three-year bonds was also increased to 10.24 per cent and 10.04 per cent.

Earlier the cut-off yield on five years was 9.82 per cent and on three years, it was 9.64 per cent.

The strong speculation in the money market about the expected discount rate hike got strength from the latest increase in the cut-off yield on the PIBs.