![Foreigners withdraw over $28m from T-bills, bonds in July](https://i.dawn.com/medium/2022/08/62e8a56b7de34.jpg)
KARACHI: Although domestic bonds offered enticing returns of up to 16 percent, the net outflow in the initial month of the current financial year was only a little over $28 million.
The State Bank of Pakistan (SBP) revealed on Monday that only $3 million in treasury bills were brought in while $31.085 million were taken out. The United Kingdom accounted for both the inflows and outflows, which was indicative of the mediocre performance of the domestic investors.
Foreigners were permitted to invest in local bonds prior to the pandemic in 2020, which garnered an immediate $3.5 billion. However, the majority of the investments departed the country when the country was hit by Covid-19, and since then no sizable foreign investment has returned to domestic bonds.
Investor confidence was affected by the political transition in Islamabad as well since the political unrest that followed had a negative impact on the environment for investments.
Due to the extremely unsettling political climate, no foreign investment in T-bills and PIBs was made during the two months of March and April; instead, sizable withdrawals were made. The nation received $9.9 million on May 6 after a nearly two and a half month hiatus.
Since mainly investors from the UK were purchasing and selling these bonds, the issue of currency depreciation and dwindling foreign exchange reserves has further increased the level of uncertainty.
However, Finance Minister Miftah Ismail reassured markets that the nation will completely fulfil the foreign payments required in FY23 and reaffirmed his optimism that the $1.2 billion IMF tranche would be released soon.
While claiming that Pakistan would get roughly $8 billion from bilateral and multilateral creditors, including the IMF, he recently disclosed to the media.