KARACHI – In a surprising show of resilience, Pakistan’s treasury bills (T-Bills) continue to attract foreign investment despite ongoing geopolitical tensions in the region. The sustained inflows reflect investor confidence in the country’s short-term debt instruments amid global uncertainty.
According to the latest data, foreign investment in T-Bills has reached USD 148.2 million in the current fiscal year (FY2025). Analysts note that while the figure is modest compared to previous highs, it remains significant given the heightened risk environment following recent conflicts involving Iran and Israel.
Despite a series of interest rate cuts by the State Bank of Pakistan (SBP)—amounting to 10 percentage points since June 2024—investors have continued to purchase short-term government securities. Typically, falling interest rates reduce returns and discourage such investments, but Pakistan’s T-Bills have retained their appeal due to higher yields compared to global benchmarks.
Financial experts believe the consistent inflows indicate that investors are still seeking relatively secure, short-duration instruments with strong returns. “The net inflow may not be large, but the fact that it remains positive amid global turmoil shows investor interest hasn’t dried up,” one analyst remarked.
The inflows come at a crucial time for Pakistan’s economy, which remains under pressure from inflation, currency volatility, and the need for external financing. While the government has recently secured some relief through IMF arrangements and bilateral support, foreign investment in local instruments like T-Bills provides an added layer of stability.
However, market observers caution that continued geopolitical instability, further rate cuts, or any downgrade in Pakistan’s credit outlook could slow the momentum in the months ahead.
Reported by PakTribune Business Desk
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