KARACHI: In the current financial year, three countries have withdrawn nearly $1 billion from Pakistan’s treasury bills, with outflows almost equaling the total inflows.
This near-parity between incoming and outgoing investments highlights growing investor caution despite relatively attractive returns.
The government’s efforts to attract foreign investment have yielded limited success. Although it has offered higher yields on T-bills than most developed and developing economies, foreign investors remain wary due to Pakistan’s fragile external sector and its $25 billion annual external debt servicing.
According to the State Bank of Pakistan, from July 1 to March 14 this fiscal year, T-bill inflows totaled $1.163 billion, while outflows reached $1.121 billion, leaving a net balance of only $42 million.
The United Kingdom, traditionally Pakistan’s largest T-bill investor, withdrew $625 million of its $710 million investment. The UAE and the US also recorded significant withdrawals of $205 million and $130 million, respectively.
Despite recent optimism following the IMF’s approval of another loan tranche and record remittance inflows, concerns persist. Exports remain sluggish, and foreign exchange reserves have recently dropped to a nine-month low.