According to data released by the State Bank of Pakistan (SBP), cumulative inflows into Pakistan’s treasury bills (T-bills) recorded $866.6 million from July to early December of FY25, while outflows totaled $550.6 million. This indicates that approximately 63.54% of foreign investments in T-bills have been withdrawn.
The cut-off yield for the 6-month T-bills in the last auction on December 11 was 11.99%, while for the 12-month T-bills, it stood at 12.2%. These rates are much lower than the 21% yield seen at the start of FY25, following a 900-basis point reduction in the SBP’s policy rate since June.
During the first week of December, foreign inflows in T-bills were recorded at zero, while outflows reached $5.5 million.
The United Kingdom remained the largest source of T-bill inflows, contributing $596.6 million from July to December 6. However, outflows from the UK were also substantial, reaching $264.5 million in the same period.Â
Inflows from the UAE stood at $85 million, with $71 million withdrawn.Â
Other notable inflows included $52 million from Australia and $50 million from Bahrain, with outflows from these countries recorded at $29 million and $4.2 million, respectively.
Experts attribute these withdrawals to declining interest rates and political uncertainty, which have significantly reduced returns on T-bills. They note that with no expectation of rising bond rates, foreign investments are likely to dry up further in the coming months.Â
Analysts emphasized that political instability is deterring both foreign and domestic investors, who are unwilling to take risks in the current economic environment.Â
