T-bills attract another $120m foreign investment

July 31, 2024 (MLN): Foreign investors maintained strong interest in Pakistani T-Bills, injecting an additional $119.77 million in the first 19 days of July 2024, according to latest data from the State Bank of Pakistan (SBP).

Last month, Foreign investors had parked a significant $194.27m into T-Bills through Special Convertible Rupee Accounts (SCRA) as the country continues to experience growing confidence amidst improved economic conditions and a stable exchange rate.

On Monday, global rating agency Fitch upgraded Pakistan's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'CCC+' from 'CCC'.

The upgrade reflects greater certainty over the continued availability of external funding, in the context of Pakistan's staff-level agreement (SLA) with the IMF on a new 37-month $7 billion Extended Fund Facility (EFF).

The rating agency noted that strong performance on the previous, more temporary IMF arrangement helped the country narrow fiscal deficits and rebuild foreign exchange (FX) reserves, and further improvements are likely.

To note, these bonds offer attractive returns of around 19.49% for three-month, 19.29% for six-month, and 18.24% for 12-month papers, payable in Pakistani rupees (PKR).

In the last fiscal year that ended in June, the debt-ridden nation witnessed a notable net inflow of $580.85m in T-Bills through SCRA.

SCRA allows foreign persons, institutions, and non-resident Pakistanis to invest into various instruments such as equities, government bonds, and TFCs.

Under this scheme, the funds are converted into Pakistani rupees and credited to the depositor's "Special Convertible Rupee" account.

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