KARACHI: Finally, with high local interest rates and stable Pak rupee, smart foreign investors are investing in local T-Bills through Special Convertible Rupee Accounts (SCRA), experts said.

After a gap of four years, a net inflow in T-Bill of $82 million was seen from March 01-22, 2024, according to official SBP data. Since January 2024 these inflows have reached $126 million.

Carry trades are common in countries with high interest rates, Muhammad Sohail, leading analyst and CEO of Topline Securities said.

T-bills cut-off yield down up to 50bps

But in case of Pakistan political uncertainties and currency risk was not allowing investors to do this arbitrage, he added.

To recall in FY20 net T-Bills inflows of $612 million came to Pakistan with peak seen in month of January 2020 with net monthly inflows of $1.4 billion.

“We think once Pakistan gets the new long term IMF deal, chances are high that more such funds will come to Pakistan to get high yielding government papers thereby providing short term support to Pakistan FX reserves and rupee,” Sohail said.

Copyright Business Recorder, 2024

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