Foreign investors brought $925.28 million in local currency debt securities during the outgoing fiscal year (July 202 to June 2021), according to the State Bank of Pakistan’s (SBP) data.
The inflow of debt came primarily due to higher yields as compared to global alternatives. Furthermore, the combined inflows in the Market Treasury Bills (MTBs) and Pakistan Investment Bonds (PIBs) from the foreign investors were higher than the outflows, showing a positive appetite for Pakistan’s debt securities.
With the inflow north of $925 and the outflow clocking in at $901.05 million for Pakistan’s short-term and long-term papers, the net inflow was recorded at $24.22 million in government securities during the current fiscal year.
Sources familiar with the matter said that higher interest rates combined with the exchange rate stability led to the increase in the size of the foreign investment in the government securities.
The SBP data also showed that foreign investors put $669 million in MTBs and $255.62 million in PIBs in July-June FY2021 while taking $879.50 million and $21.55 million out of MTBs and Pakistan Investment Bonds, respectively.