Foreign investors have continued their robust engagement with Pakistani Treasury Bills (T-Bills), infusing an additional $119.77 million in the first 19 days of July 2024, according to the latest figures from the State Bank of Pakistan (SBP).
In the previous month, investors had invested a substantial $194.27 million into T-Bills through Special Convertible Rupee Accounts (SCRA). This influx reflects growing investor confidence amid improved economic conditions and a stable exchange rate.
On Monday, Fitch Ratings upgraded Pakistan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from ‘CCC’ to ‘CCC+’. The upgrade underscores increased certainty about external funding availability, especially in light of Pakistan’s staff-level agreement (SLA) with the IMF for a new 37-month $7 billion Extended Fund Facility (EFF).
Fitch highlighted that strong performance under the previous IMF arrangement helped Pakistan reduce fiscal deficits and rebuild foreign exchange reserves, with expectations for further improvements.
T-Bills currently offer attractive returns of approximately 19.49% for three-month, 19.29% for six-month, and 18.24% for 12-month terms, with payments made in Pakistani rupees (PKR).
In the fiscal year ending June, Pakistan saw a significant net inflow of $580.85 million into T-Bills through SCRA.
The SCRA facilitates investments by foreign individuals, institutions, and non-resident Pakistanis in various financial instruments, including equities, government bonds, and term finance certificates (TFCs). Funds under this scheme are converted into Pakistani rupees and deposited into the investor’s Special Convertible Rupee account.
