Financial sources report that foreign investors find Pakistani treasury bills (T-bills) increasingly attractive, with notable inflows in early March.
The State Bank of Pakistan recorded $13.863 million in T-bill investments in the first half of March FY24. Despite economic challenges and political instability, this trend is seen positively.
The key draw for investors is the stable exchange rate, which is steady for three months and reduces investment risk.
T-bills offer high returns in Pakistan rupees, with options for dollar investments. Pre-pandemic, these bonds were popular among foreign investors, who have since sought new opportunities.
The current exchange rate stability encourages investment, although the future remains uncertain. At the same time, foreign direct investment stalls, T-bill and equity inflows have surged in FY24.
By mid-March 2024, T-bill investments had reached $80.4 m. Despite high-interest rates and persistent inflation, the stable exchange rate suggests the potential for further inflows.
Some experts suspect the IMF potentially influences exchange rate management. The dollar stood at Rs378.13 in the interbank market on Monday.
The SBP’s reserves recently rose to $8bn, with an anticipated $1.1bn from the IMF expected to boost this figure.
Plans to issue Panda Bonds could further support Pakistan’s debt servicing. The country faces a $25bn requirement in FY25, including a $1bn euro bond repayment next month.
FY24 saw $441m in investments, including T-bills and equities. The current government, echoing the caretaker finance minister, sees the need for an additional IMF package to bolster the economy.
