Bloomberg reported that Pakistan’s government bonds have witnessed the largest monthly foreign inflow in 19 months, marking the highest level since June 2024.
According to data from the State Bank of Pakistan cited in the report, net foreign investment rose to $176 million in January, compared to an outflow of $50 million during the same period last year.
The report added that nearly 85% of these inflows were directed toward short-term bonds with maturities of one year or less.
Bloomberg said that the turnaround followed a recovery in the rupee from its July low, with the currency now on track for its eighth consecutive month of gains against the US dollar.
Meanwhile, The United Arab Emirates (UAE) has agreed to roll over Pakistan’s $2 billion deposit for a period of two months.
According to a report in The News, The reprieve came after Pakistan’s Deputy Prime Minister Ishaq Dar approached the UAE government earlier. Subsequently, UAE has allowed the rollover of the funds until April 17 at an interest rate of 6.5%.
It should be noted that the State Bank of Pakistan was expected to return the $2 billion deposit.
Pakistan’s external liabilities are predominantly short-term, making them more exposed to geopolitical uncertainties, particularly since a large share is owed to friendly nations such as the UAE, Saudi Arabia, and China.
