KARACHI: Total gross divestment during March 2020 has just reached $1.501 billion, according to data released by the State Bank of Pakistan (SBP), in an expected trend of foreign outflows leaving the country due to the COVID-19 outbreak.
Foreign investors divested $95 million of treasury bills (T-bills) on March 24, as per the Special Convertible Rupee Account (SCRA), which tracks inflows and outflows from foreign countries.
This amount was enough to tip over total gross divestment over the $1.5 billion mark, which on March 13 stood at $1.406 billion.
The net investment in T-bills from July 2019 to date now amounts to $1.598 billion. At the rate of foreign outflows leaving the country, the net investment looks certain to fall to, or even further, than the December 2019 figure of $1.450 billion.
The month of March has seen a significant amount of money leave the country. Foreign investors divested $92 million of treasury T-bills on March 20, divested $47 million of T-bills on March 17 and $222 million net worth of T-bills on March 13.
Similarly, on March 12, foreign investors divested $166 million of T-bills; on March 11, foreign investors divested $251 million net worth of T-bills, while on March 10, foreign investors divested $136 million of T-bills.
Divestment really took off in late February, as foreign investors divested $67 million of T-bills on February 28.
In the monetary policy announcement on March 17 at the State Bank, Dr Reza Baqir said globally, because of coronavirus, there has been a general ‘flight to safety’, that was not linked to whether the SBP significantly changed its policy rate or not.
The SBP cut the policy rate by 75 basis points on March 17, from 13.25pc to 12.5pc, and then by an additional 150 basis points to 11pc on March 24.