Highest US Dollar Inflows in T-Bills after 4 Years

Staff Report

Finally, with high local interest rates and a stable Pak rupee, savvy foreign investors are delving into local T-Bills through Special Convertible Rupee Accounts (SCRA).

After a hiatus of 4 years, a net inflow in T-Bills of US$82 million was observed from March 1-22, 2024, according to official SBP data. Since January 2024, these inflows have totaled US$126 million.

Carry trades are common in countries with high interest rates. However, in the case of Pakistan, political uncertainties and currency risks were hindering investors from engaging in this arbitrage.

Recall that in FY20, net T-Bills inflows of US$612 million flowed into Pakistan, with the peak observed in January 2020, boasting net monthly inflows of US$1.4 billion.Textile Exports up 3% in March 2024

We anticipate that once Pakistan secures a new long-term IMF deal, the likelihood is high that more such funds will pour into Pakistan to acquire high-yielding government papers, thereby providing short-term support to Pakistan’s FX reserves and the rupee,” Topline said in a report.