The interest rates the Pakistani government pays to borrow money via Treasury Bills (short-term) and Pakistan Investment Bonds (long-term).
Source: SBP EasyData, weighted average yield from periodic T-Bill auctions.
Treasury Bills (T-Bills) are short-term government debt instruments maturing in 3, 6, or 12 months, sold at a discount and redeemed at face value. PIBs (Pakistan Investment Bonds) are longer-term, ranging from 3 to 30 years.
The 3-month T-Bill yield is Pakistan's key short-term benchmark rate, closely tracking the SBP policy rate. The spread between long and short-term yields (the yield curve) reflects what markets expect for future interest rates.
When PIB yields are below T-Bill yields, the curve is 'inverted' — markets expect rate cuts ahead. When PIB yields are higher, it's a 'normal' curve reflecting a stable outlook.
Bond yields directly affect the government's debt servicing costs — Pakistan's banking sector also holds large amounts of these securities, so yield movements significantly impact bank profitability.
The yield curve shape (the 3Y-3M spread) is a useful, market-based signal of where investors expect interest rates and inflation to head over the next few years.