Islamabad, Sep 26: Even though cut-off yields on a range of tenors have been steadily declining, foreign investors have poured a record $55 million into Pakistan’s short-term Treasury bills (T-bills) in the first week of September.
Early September saw a shift in the investment environment as a result of macroeconomic stability, following slow inflows in August. $28.624 million and $26.707 million of the $55.332 million invested in T-bills came from Bahrain and the United Kingdom, respectively.
Foreign investors have found the 17.47% return on the three-month T-bills extremely appealing, especially in light of the recent interest rate reduction by the US Federal Reserve, which have left developed economies with significantly lower yields.
An atmosphere that was conducive to foreign investment included elements including reducing interest rates, a stable currency rate, decreasing inflation, and a current account deficit of only $171 million for the first two months of FY25.
Experts in finance and economics predict that the economy will continue to stabilize, particularly with the acceptance of a new IMF loan that may increase investor confidence. In terms of withdrawals, T-bills only lost $3.317 million in the first week of September.
With $386.7 million in inflows thus far for the current fiscal year, experts anticipate further inflows in the upcoming months that is, provided the current account deficit is kept under control and debt servicing is kept within reasonable limits.
