No fresh inflows in February as Pakistan records $732 million T-bill investment in seven months

Foreign investment in Pakistan’s treasury bills (T-bills) stalled in early February 2026 after strong inflows in January, with State Bank of Pakistan (SBP) data showing no new inflows as of February 6 and a net outflow of $22.5 million during the period.

T-bills, offering returns of up to 10%, had attracted $176 million in January. However, no fresh foreign investment was recorded in the first six days of February.

During July-January FY26, total foreign inflows into T-bills amounted to $732 million, while outflows reached $499 million, indicating that around 68% of invested funds exited during the period.

According to SBP data, the largest T-bill inflows during July-January originated from the UAE ($225 million), Bahrain ($174 million), the UK ($171 million) and the US ($61 million), with the two Gulf countries contributing about $400 million combined.

In Pakistan Investment Bonds (PIBs), inflows during the same period stood at $53 million against outflows of $15 million. No foreign inflows into PIBs were recorded in early February.

Analysts attributed January’s inflows to exchange rate stability and the appeal of high-yield government securities amid global financial uncertainty. However, they said shifting risk appetite and external volatility have affected investment decisions.

Some analysts suggested that overseas Pakistanis may account for part of the portfolio inflows, seeking short-term returns.

The slowdown in portfolio flows comes alongside weaker foreign direct investment (FDI). FDI declined 43% in the first seven months of FY26 to $808 million, compared with $1.425 billion in the same period last year.