KARACHI- The State Bank of Pakistan, the country’s central bank has planned to borrow as much as Rs 1.6 trillion from commercial banks in next three months to plug fiscal deficit.
The State Bank of Pakistan through its email envisaged a plan to borrow from commercial banks through the sale of treasury bills and Pakistan Investment Bonds.
The central bank to sell treasury bills having maturity of three months, six months and one year amounting to Rs 1.450 trillion through six auctions, starting November 9. In November, the bank plans to hold auction of Rs 500 billion worth of treasury bills, December Rs 350 billion and in January Rs 600 billion.
Moreover, the central bank plans to sell Pakistan Investment Bonds, or long -term bonds through three auction, each carrying a target of Rs 50 billion.
“With inflation of October reaching 4.21 percent , the probability of benchmark interest rate to remain unchanged at 5,75 percent”, said an analyst. However, commercial banks might raise pressure on the central bank to hike interest rate to maintain the borrowing spree of the government in order to plug fiscal space.