Pakistan bonds attract largest foreign inflows in 19 months

February 13, 2026 (MLN): Pakistan recorded its biggest monthly net foreign inflows into sovereign bonds since June 2024, signalling renewed investor confidence as the rupee strengthens and macroeconomic conditions improve, as reported by Bloomberg.

Net foreign inflows reached $176 million in January, a sharp turnaround from withdrawals of $50 million during the same month last year, based on figures from the State Bank of Pakistan.

Short-term bonds with maturities of one year or less accounted for about 85% of total inflows, highlighting investors’ preference for lower-risk exposure.

The surge in inflows coincides with a sustained recovery in Pakistan’s currency. The rupee has rebounded from its July lows and is on track to strengthen for an eighth consecutive month against the US dollar.

Foreign exchange reserves have also improved, now covering more than three months of imports, supported in part by a $7 billion program secured from the International Monetary Fund in September 2024.

Market participants attribute the renewed interest largely to currency stability. Mohammed Sohail, Chief Executive Officer of Topline Securities Ltd., noted that a stable rupee has been a key factor attracting foreign investors back into local debt markets.

Meanwhile, BMI, a research unit of Fitch Solutions, expects policymakers to maintain the rupee near 280 per dollar this year. 

Khurram Schehzad, adviser to Pakistan’s finance minister, also cited currency stability, improving external accounts, and policy continuity as key drivers behind the inflows, the Bloomberg report added.

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