The auction calendar of the State Bank of Pakistan (SBP) shows that the government will have to raise Rs. 5 trillion in the remaining three months of the current fiscal year to make up for the revenue and expenditure gap.
This amount needs to be borrowed from banks in three months (May-July) reported a national daily. Out of these, Rs. 4.1 trillion is likely to come from market treasury bills, while the remaining Rs. 900 billion will come from the Pakistan investment bonds (PIBs) by the end of May.
The central bank will auction three-, five- 10-, 15-, 20-, and 30-year fixed-rate PIBs worth Rs. 375 billion. SBP will also issue five-year, three-year, and two-year floating PIBs worth Rs. 210 billion Rs. 210 billion and Rs. 105 billion, respectively.
The government will continue to follow the commitment of not borrowing from the central bank. Instead, it will mobilize funds through commercial banks and National Savings Scheme to finance the budget deficit.
In the first half of FY2021 (July to December 2020), the government raised funds through privatization and external grants, in addition to borrowing. Net financing of Rs. 1.4 trillion was raised during this period, whereby Rs. 450 billion came from privatization and grants, and the remaining Rs. 1.04 trillion came through domestic borrowing.