Investment of at least $400 million has flown out from the country mainly due to the ongoing political crisis. Of the combined outflows of around $1.5 billion during the ongoing fiscal year, as much as $400 million has flown out of the country during March alone, as per the data of the State Bank of Pakistan (SBP).
According to the report, the outflows from Pakistan Investment Bonds (PIBs) reached $353 million in March. The outflows from the PIBs were recorded at $102 million during the first 14 days of March, which then skyrocketed by 147 percent to $251.5 million within the next ten days.
At present, major foreign investment outflows are from the PIBs despite high-yields returns on these bonds, which were increased to 11.85 percent for the three-year tenure, 11.75 percent for five years, and 11.74 percent for 10 years.
Similarly, the yields on the treasury bills rose to 11.99 percent for three-month papers, 12.5 percent for six months, and 12.7 percent for 12 months.
Money market dealers believe that the returns on the treasury bills and PIBs are highly attractive for foreign investors, as such high rates on government-guaranteed risk-free bonds are unprecedented.
During the current fiscal year, the total PIB inflows stood at $104.3 million so far, and inflows have remained at just $0.15 million during this month.
While inflows in treasury bills have remained zero this month, outflows have reached $100.4 million, showing fast-eroding foreign investment from domestic bonds.
The total inflows of the PIBs and treasury bills during March stand at $0.15 million, while outflows of the two domestic bonds are $352 million. If the outflows from equity are counted, the total outflows of foreign investment were $402.35 million, while the cumulative net flow was $378.3 million. The inflows in equity during March stand at $23.9 million.
The single-day outflow on 24 March was $91.3 million against an inflow of $2.3 million in equity. The outflows from the PIBs and treasury bills were $50 million and $34.8 million, respectively, during the same day, the report shows.
During the ongoing fiscal year, the total outflows from equity, PIBs, and treasury bills stand at $1.558 billion against total inflows of $654.3 million. The cumulative net flow during the nine months through March 2022 comes in at $904.36 million.
Some experts believe that the rapid outflows could be an outcome of the ongoing political crisis in the country, and it may become worse,” he said.
While commenting on the issue, the spokesman for the Ministry of Finance, Muzzammil Aslam, said that the main reason behind the outflows is the prevalent political turmoil.
The government and the central bank had launched the bonds two years ago to attract foreign investors, and the efforts continue to this day, as evident from the high returns on both bonds.
