Foreign inflows into T-bills stall amid Gulf crisis

KARACHI: The impact of the Gulf war is not limited to oil and gas markets, as foreign investment from the region in Pakistan’s treasury bills (T-bills) dropped to zero during the first six days of March while outflows during the same period reached $78 million.

Latest data from the State Bank of Pakistan (SBP) showed that foreign investment in T-bills stood at only $9m until March 6, all of it from the United Kingdom, a country not directly affected by the conflict.

Previously, the UAE and Bahrain had been the main investors in Pakistan’s T-bills, which offer returns of up to 11 per cent, among the highest in emerging markets.

However, the Feb 28 attacks on Iran by Israel and the United States have changed the global economic outlook. Analysts warn that Pakistan could face significant economic fallout despite not being directly involved in the conflict.

SBP data shows that the UAE had invested around $267m in T-bills earlier but has halted further investment amid regional instability. Although the UAE is not directly involved in the fighting, Iran has carried out strikes on American and Israeli targets within........

© Dawn Business