Pakistan drew the biggest monthly net foreign inflows into its sovereign bonds in 19 months, i.e. since June 2024, reported Bloomberg on Thursday, which indicates improving investor sentiment for the market as the Pakistani rupee strengthens.
According to the report, net inflows in January reached $176 million, compared with withdrawals of $50 million a year ago, showed the State Bank of Pakistan (SBP) data.
Short-term bonds, having a duration of one year or less, drew 85% of these flows, it said.
“The shift comes as Pakistan’s rupee recovers from its July low and is on pace to rise against the dollar for an eighth month,” reported Bloomberg.
Mohammed Sohail, CEO at Topline Securities Ltd, attributed the rise in inflows to a stable currency
Meanwhile, BMI, a unit of Fitch Solutions, expects that policymakers will keep the rupee at around 280 against the US dollar in 2026.
Khurram Schehzad, an adviser to the finance minister of Pakistan, mentioned currency stability, improving external balances and policy continuity among factors driving the flows.
The currency settled at 279.62 against the US dollar in the interbank market on Friday.
American Dollar Exchange Rate