KARACHI – The State Bank of Pakistan (SBP) has decided to launch newinitiative to help government come out of the financial crisis.

SBP will auction Rs5.15 trillion of Market Treasury Bills (MTBs) andPakistan Investment Bonds (PIBs) in September-November 2018 to assist thegovernment in financing the budget deficit.

According to the central bank, it will auction Rs4.850 trillion of three,six and twelve months debt via T-bills and intends to float Rs150 billionof three, five, ten and twenty-year bonds as per tenor-wise targets ofPIBs, reports *The News.*

Also, the central bank published the PIB floating rate auction calendar andrevealed it would sell Rs150 billion of 10-year floating rate PIB onOctober 17th.

And the latest targets show the government would continue to depend on bankborrowing to manage its spending requirement.

The budget deficit clocked at 6.6 percent of gross domestic product in FY18against 5.8 percent in FY17, touching a five-year high.

Also, this has given banks an opportunity to earn more money from easilyinvesting in government securities amid a negative credit spread.

As per data released by SBP, commercial bank holdings in governmentsecurities posted a slight increase, touching Rs7.372 trillion at end ofJune 2018 against Rs7.363 trillion in the same period of last year.