Foreign investment in Pakistan’s treasury bills slowed significantly in early March, according to new data released by the State Bank of Pakistan (SBP).
By March 6, total foreign inflows into T-bills reached only $9 million, and the entire amount came from the United Kingdom.
At the same time, foreign investors withdrew around $78 million during the first six days of the month. The sharp slowdown reflects growing caution among international investors, particularly those from Gulf countries.
Earlier, the United Arab Emirates and Bahrain were among the major investors in Pakistan’s treasury bills, attracted by returns of around 11 percent.
However, new data shows that both countries have paused fresh investments following rising geopolitical tensions in the Middle East.
According to SBP figures, the UAE had previously invested about $267 million in Pakistan’s T-bills but has not made additional purchases since the regional conflict intensified.
Similarly, Bahrain had earlier invested around $187.5 million but has also stopped new investments.
Foreign investment in treasury bills has played an important role in supporting Pakistan’s economy. These inflows help strengthen foreign exchange reserves and provide stability to the country’s currency.
Over the past eight months, other countries have also participated in Pakistan’s T-bill market. The United Kingdom invested around $220 million, while Singapore contributed $77 million and Australia invested about $34 million.
Financial analysts believe the ongoing regional conflict has affected investor confidence, particularly in the Middle East. As a result, inflows from Gulf investors may remain limited in the near future.
Economists also warn that rising global oil prices could increase inflation in Pakistan. If inflation rises significantly, the SBP may consider raising interest rates, which could lead to higher treasury bill returns.