Foreign investors have poured a record $55 million into Pakistan’s short-term treasury bills (T-bills) in the first week of September, despite the steady decline in cut-off yields across various tenors.
After sluggish inflows in August, the investment landscape changed in early September, driven by macroeconomic stability.
Out of $55.332 million poured into T-bills, the investments of $28.624 million came from Bahrain and $26.707 million from the United Kingdom.
The three-month T-bills, offering a return of 17.47%, have been particularly attractive for foreign investors, especially after the US Federal Reserve’s recent interest rate cuts left developed economies with much lower returns.
Factors such as a stable exchange rate, declining inflation, falling interest rates, and a current account deficit of just $171 million for the first two months of FY25, all contributed to a favorable environment for foreign investment.
Economists and financial experts anticipate further economic stabilization, especially with the approval of a new IMF loan, which could further boost investor confidence.
On the outflow side, only $3.317 million exited from T-bills during the first week of September.
Total inflows for the current fiscal year stand at $386.7 million, with experts expecting more investments in the coming months if the current account deficit remains controlled and debt servicing remains manageable.
