KARACHI: Foreign investment in government securities has exceeded $711 million since the beginning of the current fiscal year as the country saw an inflow of an unprecedented level on high interest rates and exchange rate stability.
However, analysts say this reserve build-up process is choking growth.
Foreign investment in treasury bills reached a new high of $267 million between November 1-12. The US, UK and the UAE have increased their portfolios of government T-bills and Pakistan Investment Bonds. Investment from the UK clocked in at $169.5 million, followed by the US ($92.6 million) and the UAE ($5 million). Since the start of the current fiscal year, foreign investment in government securities stood at $711 million.
State Bank of Pakistan (SBP) Governor Reza Baqir said foreign investors were investing in T-bills because of attractive rates and about $500-600 million worth of foreign investment has arrived in short-term government bonds.