REUTERS ADDS: The central bank had also rejected all offers received for the bonds in the last two auctions on August 17 and November 11.
The SBP did not give any reason for the rejection of the bids, but bankers said it was due to the high rates offered by the primary dealers.
A dealer at a major local bank said that a lacklustre participation in the auction showed most banks were unwilling to buy bonds at yields the government wanted.
"With the interest rates on the rise, nobody would be willing to invest in the longer tenors at lower rates," he said.
The central bank has raised short-end interest rates steadily in recent months, with the yield on the six-month Treasury bill rising almost three percentage points since July 2004 to 5.2056 percent by March 2.
The bank said in its quarterly economic report issued this week that "the higher inflation will necessitate a further tightening of monetary policy in coming months".
The Consumer Price Index rose 9.95 percent in the 12 months through February - the highest inflation rates since 1997.
"Till the time the interest rate scenario does not stabilise, not many people would be willing to invest in the long-term bonds," the bank dealer said.