Pakistan’s short-term government securities continue to be a highly attractive option for foreign investors as they attracted a net inflow of $174.75 million in July.

Data shared by the State Bank of Pakistan (SBP) showed that foreign inflows in treasury bills (T-bills) in fiscal year 2023-2024 amounted to $744.26 million, while outflows were around $163.4 million. The net foreign investment in T-bills came in at $580.85 million, of which $230 million alone was in May.

This is the second-highest level compared to $612 million foreign investment in T-Bills in FY20. Moreover, January 2020 saw the highest-ever net foreign inflows in T-bills at $1.4 billion.

Analysts attribute this surge in foreign investment to Pakistan’s competitive interest rates, which are currently the highest in the region at 19.5%.

In comparison, India offers an interest rate of 6.5%, while both Bangladesh and Sri Lanka maintain rates of 8.5%.

This favorable interest rate environment has made Pakistan’s government papers an appealing choice for foreign investors seeking attractive returns.