KARACHI: The government plans to borrow Rs1.5 trillion in three months (Sept-Nov) through the sale of Market Treasury Bills (T-bills) and Pakistan Investment Bonds (PIBs), the State Bank of Pakistan reported on Wednesday.

The government will borrow Rs1.35 trillion through auction of T-bills, while it has set minimum target of Rs150 billion for the auction of PIBs.

However, in the first two months of this fiscal year (FY16) the government, instead of sticking to its targets, borrowed more to meet the growing expenses.

In the auction of T-bills held on Wednesday, the government raised Rs188bn, breaching the target of Rs150bn set for this auction.

The amount borrowed for three, six and 12 months were Rs67bn, Rs50bn and Rs69bn, respectively, which were close to each other in volume.

In previous auctions, the banks were eager to invest in long-term papers in the wake of falling inflation and expected interest rate cuts. But the prevailing interest rate (6.5pc target rate) is considered as the lowest and little expectations were found about any further cut.

Published in Dawn, September 3rd, 2015

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