T-bills attract $1.14bn in 8MFY25

Despite declining returns, foreign investors parked over $1 billion in the Treasury Bills (T-bills) in the first eight months of FY25. However, 84 per cent of this inflow left the country during the same period, according to data released by the State Bank of Pakistan (SBP) on Tuesday. The short-term T-bill tenors remained the key attraction, as most inflows came from the United Kingdom and the United Arab Emirates. Financial experts believe that the inflows from the UK and UAE mostly belong to the overseas Pakistanis since the returns on T-bills were much higher than those countries. A large number of Pakistanis are living in these two countries. The returns on these countries are in the range of 3-5pc. The returns on T-bills started falling in FY25 with a steep deceleration in inflation and, consequently, the interest rates. The SBP policy rate dropped from 22pc to 12pc while the return on T-bill fell close to this rate. According to the SBP data, the T-bills attracted $1.147bn investment during July-February FY25. The month-to-month data showed the inflows remained high despite a fall in the returns. At the same time, the withdrawals were also high during the period.