Foreign investment in Pakistan's government securities has climbed sharply. According to the latest State Bank of Pakistan data, foreign investors put a combined $747.2 million into Pakistan Investment Bonds (PIBs) and treasury bills during the first four months of fiscal year 2026-27 (July-October).
PIBs attracted $509.2 million over the period, the highest ever for those four months, while treasury bills drew $238 million. About $251 million flowed into the bonds in October alone.
Gulf investors lead
According to sources, the United Arab Emirates accounted for $395.7 million of the bond purchases, followed by Bahrain with $80 million; Bahrain also invested $72 million in treasury bills. The United Kingdom was the largest buyer of treasury bills at $80 million. Foreign inflows into the stock market were much smaller at $124.4 million over the four months, bringing total inflows into domestic bonds and equities to $872 million.
High returns are the main draw. The State Bank raised its policy rate by 50 basis points to 12 per cent on October 26, lifting the benchmark six-month treasury bill yield to 12.54 per cent. A stable exchange rate for more than a year and the ongoing IMF programme have also reassured investors. Some financial experts warn, however, that high returns on government debt are leaving less room for private businesses to borrow from banks.