Billions of dollars pour in Pakistan from UK and USA
Shares
ISLAMABAD -;Foreign investors from the UK and the USA are making handsome investments in the government’s papers, particularly T-Bills, due to lucrative and short-term profits.
According to the State Bank of Pakistan, investors from the UK remained at the top for T-bills with an investment of more than $1.5 billion in the past seven months of the current financial year.
Investors from the USA also invested an amount of $0.75 billion in T-Bills during the same period with foreign investment pouring in the country at a record level. Investors from these countries were focusing on Pakistan’s debt instruments as major global fund managers were mostly operating in the two developed countries. ------------------------------
Market Treasury Bills or T-Bills are the instruments that the central bank floats in the market to raise the money for a period of three to 12 months. Usually, financial institutions make the investment in such government paper and books guaranteed and easy returns, however, this time overwhelming foreign investment is being witnessed.
Moreover, the central bank waved off taxes on the investment on the government’s papers earlier in January.
According to analysts, foreign investors have booked at least 20% on such investments so far in Pakistan—which is highly attractive in terms of investment throughout the world. They will continue to make handsome returns even if the interest/profit rates drop gradually in the coming months.
Besides investors from UK and USA, fund managers from other countries, including Luxembourg, the UAE, Bahrain, Cayman Islands and Ireland have also started making investments in Pakistan.
These investors are also making investments in the stock market and long-term Pakistan Investment Bonds as early $2.5 billion foreign investment has been received so far in T-Bills, PIBs, and equity markets by the country in the last seven months.
The inflows of investments significantly improved the level of foreign exchange reserves of the country stabilizing the exchange rate of Dollar versus Rupee and impacted positively on the current account situation as well.
