Nearly 90 percent of foreign investment recently parked in Pakistan’s domestic bonds has now exited the country, according to latest data by the State Bank of Pakistan (SBP).
While treasury bill yields have climbed to around 11.5 percent, the ongoing Gulf War has overshadowed attractive returns and discouraged foreign participation.
During the first nine months of fiscal year 2026, total foreign inflows into government securities stood at $886.7 million, while withdrawals surged to roughly $794 million. This left only about $93 million (~90%) in remaining investment.
Will bond outflows Hurt Economy?
The bond outflows alone may not destabilize markets immediately. However, a far greater risk lies in the potential withdrawal or non-renewal of financial deposits held by friendly nations. Everyone now knows that the United Arab Emirates is reluctant to roll over a $2 billion deposit maturing this month.
Meanwhile, China and Saudi Arabia also maintain key deposits with SBP, but uncertainty now surrounds whether these arrangements will continue unchanged if issues persist.
Also, Pakistan’s currency stability could come under pressure if reserves decline further. As per latest SBP payments schedule, around $5.3 billion is expected to be paid off in bonds, UAE deposits and borrowings under other commitments.
In March, around $227 million exited treasury bills compared to just $19 million in fresh inflows.
The largest withdrawal $281 million was repatriated to the United Kingdom. Investors from the UAE pulled out $209 million, followed by Bahrain at $170 million, Singapore at $77.6 million, and the United States $32 million.
Misleading headline, 90% of march investment left exits.
Yeah why is that exactly ?
When your country people are ignored. When your policy makers are just rich elites disconnected from the people.
When your country spends more on military then jobs and affording stuff. What do you expect?
Even now trump is creating issues in Iran. When we should be stopping him , we are busy lecturing iran.
All this can be avoided if only someone can tell trump to go back and end this madness.
Ofcourse inflation will rise
Ofcourse people will pull out funds
Trump doesn’t care.
Robust