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Pakistan Investment Bonds fail to attract any foreign inflows during July

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The first month of the 2021-22 financial year has passed without any foreign inflow in the Pakistan Investment Bonds (PIBs). 

According to the report of the State Bank of Pakistan, issued on Friday, July passed without any foreign inflow in the PIBs which had attracted $256 million during the fiscal year 2020-21. There has been witnessed a sudden stop to foreign inflows for Pakistan Investment Bonds during the first month of the current financial year against a net inflow of $22 million in June.  

“The quick and sudden return of the US forces from Afghanistan and war in most of the country has created fear among the foreign investors as well as Pakistanis about the possible negative impact,” said a senior banker.

Read more: Pakistan Investment Bonds attract $12.7 million after hike in yields

The Pakistan Investment Bonds are most attractive as they still offer the highest returns. The return of 8.69% is offered for three years, 9.198% is offered for five years and 10% is offered for 10 years. The economists are of the view that this is a very attractive offer but the sudden change in the political situation of the region has badly affected the investment of Pakistan Investment Bonds in an outgoing month.  

July saw zero foreign inflow into investment bonds

The changing condition for the investment in treasury bills continued in July as there was a little gap between inflows and outflows. In the month of June, the inflows in the treasury bills were more than the outflows. In the equity market, the inflow in the month of July was $26.7 million and the outflows were $49.2 million.  

Due to the Covid-19 in March 2020, Pakistan saw the net outflow of foreign investment in domestic bonds and equity market but the inflow began from September last year, especially in Pakistan Investment Bonds.  

Another important source to attract the US dollar is the Roshan Pakistan Account which was launched in the second quarter of the outgoing fiscal year. This source has been found extremely useful as according to the official sources of the State Bank of Pakistan, Roshan Digital Accounts reached $1.8 billion. 

The financial experts of the country are of the opinion that the inflow in the treasury bills can once again turn into hot money; the number of inflows from April to June last year had enhanced greatly. 

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