Foreign investors withdrew $149.5 million from Market Treasury Bills (T-bills) in January 2025, while fresh investments stood at $117.1 million, resulting in a net outflow of $32.4 million, according to data released by the State Bank of Pakistan (SBP).
For the current fiscal year (July 1, 2024 – January 24, 2025), foreign investors purchased $1.028 billion worth of T-bills, while withdrawals totaled $880.4 million, leaving a net inflow of $148.2 million.
The SBP recently reduced the benchmark interest rate by 100 basis points to 12%, citing declining inflation and a need to support economic growth. This latest rate cut has brought the total reduction in borrowing costs to 1,000 basis points since June 2024, making T-bills less attractive to foreign investors.
Market analysts suggest that the $156.1 million outflow in December 2024, followed by $32.4 million in January 2025, signals a shift in investor sentiment after months of strong inflows.Â
Meanwhile, Pakistan Investment Bonds (PIBs), which offer long-term investment opportunities, failed to attract fresh foreign inflows during the month. Instead, they recorded an outflow of $0.875 million in January 2025.
Despite these outflows, foreign investment in government securities remains positive for FY2025. Between July 1, 2024, and January 24, 2025, foreign investors purchased $1.028 billion worth of T-bills, while withdrawals totaled $880.4 million, resulting in a net inflow of $148.2 million.
In the long-term bond segment, PIBs have shown greater resilience, with total foreign investment reaching $19.6 million in the first seven months of FY25, despite outflows of $2.04 million.
