SBP Revises Operational Instructions, Procedure For Buyback Of Government Securities

The State Bank of Pakistan, on Tuesday, issued the revised operational instructions and procedure for buyback of government securities which extended the scope of the buy back operations

KARACHI, (UrduPoint / Pakistan Point News - 11th Feb, 2025) The State Bank of Pakistan, on Tuesday, issued the revised operational instructions and procedure for buyback of government securities which extended the scope of the buy back operations.

The revised instructions in terms of MTB Rules 1998 and PIB Rules 2000, according to a circular issued by Domestic Market and Monetary Management Department of the central bank, will supersede earlier instructions issued via a DMMD circular in September 2024.

As per revised operational instructions and procedure, the SBP will conduct auctions for the “Buyback” of Government Securities, including MTBs and PIBs (Zero Coupon, Fixed and Floater) on behalf of the Government of Pakistan.

It is pertinent to mention that the circular superseded was limited to procedure of auctions for the buyback of MTBs only and it also provided for determination of the buyback price of the security through multiple-price competitive auction process. The provision has also been withdrawn in the revised instructions.

As per revised procedure, the central bank will announce the details, such as security, target amount, auction schedule, etc.

, and auction result for the buyback of Government Securities on SBP pages at Refinitiv and Bloomberg, and on SBP website while all Primary Dealers will be eligible to submit competitive bids in the auctions and non-competitive bids could also be submitted as per existing instructions.

Eligible participants are required to submit the Bid price (per Rs.100 of face value) for the buyback up to four decimal places as well as the amount (face value) of the securities in the auction bidding on Bloomberg Auction Module (AUPD) within the stipulated time.

On the date of settlement, the bought back securities will be debited from the SGLA of successful bidders while their current accounts will be credited with the accepted amount, the circular read.

Apart from the above, all other auction rules and procedures shall apply to the buyback auctions as defined in various circulars related to the auction of Marketable Government Securities, it concluded.