Pakistan sovereign bonds attract largest foreign inflows in 19 months

Pakistan drew the largest monthly net foreign inflows into its sovereign bonds in 19 months, with net investment reaching $176 million in January, according to a report by Bloomberg, signaling improved investor confidence in the country’s debt markets.

The January figure marks a significant turnaround from a net outflow of $50 million in the same month a year earlier, based on State Bank of Pakistan (SBP) data compiled in the report.

According to Bloomberg, most of the inflows were into short-term sovereign bonds with durations of one year or less, which accounted for roughly 85 percent of the total. The increase in foreign investment comes amid signs of strengthening in the Pakistani rupee and broader improvements in macroeconomic sentiment.

Market analysts noted that the return of overseas investment into Pakistan’s fixed-income assets reflects growing confidence as external conditions stabilise and the currency shows resilience.

The uptick is seen as a positive development in Pakistan’s financial markets, particularly after extended periods of outflows and volatility that have challenged local debt instruments in recent years.