Government Repurchases Rs585 Billion In PIBs

The government repurchased Rs585 billion worth of five-year floating-rate Pakistan Investment Bonds (PIBs) on Thursday, aiming to lower refinancing pressure on securities due for maturity in 2028-29 while also supporting liquidity in the interbank market.

According to the State Bank of Pakistan (SBP), the buyback auction involved six floating-rate PIBs with semi-annual profit payments and different issuance and maturity dates. The government had set a target of purchasing securities worth between Rs500 billion and Rs600 billion.

Investors submitted bids totaling Rs1.306 trillion, of which the government accepted Rs585 billion, representing approximately 45% of the total offers.

After including accrued interest, the overall payment for the repurchased securities is estimated at around Rs605 billion.

All six securities were bought at prices slightly below their face value. For the security that received the largest volume of offers, amounting to Rs336 billion, the government accepted only Rs2.5 billion.

The buyback is expected to reduce the proportion of floating-rate debt in the government’s domestic borrowing portfolio and ease refinancing risks associated with bonds maturing in 2028-29. Settlement scheduled for September 11 may also add liquidity to the interbank market and help limit short-term yields.

The latest transaction comes nearly two weeks after the government completed its biggest-ever early repayment of domestic debt, settling Rs1.2 trillion owed to the SBP ahead of its scheduled maturity.

With that payment, the total domestic debt retired before maturity has exceeded Rs5.92 trillion.

The government’s ability to make early debt repayments has also been supported by transfers of SBP profits, stronger tax collections and expenditure controls. The central bank transferred Rs1.9 trillion in profits to the government during FY26, compared with Rs2.5 trillion in FY25.

Pakistan conducted its first government securities buyback auction in September 2024, when it repurchased Rs351 billion worth of short-term Market Treasury Bills. The procedures governing such transactions were later streamlined and revised in February 2025.