Foreign investment in Pakistan Investment Bonds surpassed $500 million during the first four months of fiscal year 2026-27, dawn.com reported, driven by high domestic bond yields.
Foreign Inflows Target Domestic Yields
Investors purchased $509.2 million worth of Pakistan Investment Bonds between July and October, setting a high watermark for the period, according to latest State Bank of Pakistan data cited by dawn.com. October alone brought in about $251m. Meanwhile, treasury bill inflows reached $238 million over the same four-month span.
Pakistan Investment Bonds Drew $509.2 Million in Four Months
- Pakistan Investment Bonds drew $509.2 million in July-October FY27, with about $251m arriving in October alone.
- The United Arab Emirates deployed $395.7m into PIBs, while the United Kingdom led T-bill investments with $80m.
- The State Bank of Pakistan raised its policy rate by 50 basis points to 12 per cent on Oct 26, pushing benchmark six-month T-bill returns to 12.54pc.
Gulf Capital Shifts to South Asian Debt
The United Arab Emirates accounted for $395.7m of the total PIB investments, dawn.com reported. The UAE has confronted severe economic pressure following the onset of the Gulf war on Feb 28, which sharply impacted trade, tourism, and property sectors in Dubai.
Bahrain emerged as the second-largest PIB investor at $80m, alongside a $72m allocation to treasury bills. Conversely, the United Kingdom directed $80m into T-bills, while equity market inflows lagged at $124.4m across the four months, bringing total combined inflows to $872m.
High Policy Rates Restrict Private Sector Borrowing Capacity
These investments arrived after the State Bank of Pakistan increased its policy rate by 50 basis points to 12 per cent on Oct 26, cementing regional highs for domestic bond returns. Following the rate adjustment, the benchmark six-month treasury bill offers a 12.54pc return.
Financial experts told dawn.com that these elevated returns have absorbed substantial domestic capital, restricting the private sector’s ability to borrow from the banking system at competitive rates. Although the government has urged banks to increase lending to small and medium enterprises and housing, commercial lending to those sectors remains subdued.
| Asset Class | Inflow Amount | Top Investor Country |
|---|---|---|
| Pakistan Investment Bonds (PIBs) | $509.2 million | United Arab Emirates ($395.7m) |
| Treasury Bills (T-bills) | $238 million | United Kingdom ($80m) |
| Equity Market | $124.4m | Not specified |
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
Foreign investment in Pakistan Investment Bonds exceeded $500 million in the first four months of 2026-27, reflecting growing interest in the higher returns offered by domestic bonds.https://t.co/PPmDBWOIIj
