Gulf inflows in domestic bonds

According to Dawn, overseas investors put $188m into Pakistan's domestic government bonds in the opening nine days of October, citing State Bank of Pakistan data. Of that total, $110m went into Pakistan Investment Bonds and $78m into treasury bills. Gulf investors showed particular interest in the longer-term Pakistan Investment Bonds, a trend the data highlights.

The United Arab Emirates was the largest source, placing $50m in treasury bills and $80m in Pakistan Investment Bonds. Bahrain added $30m in the longer bonds and $10m in T-bills, while outflows for the period totalled $38.16m, far below the inflows. Cumulative foreign investment in government securities stands at $656m since the fiscal year began, split between $404m in PIBs and $252m in treasury bills.

Dawn observed that earlier foreign inflows into government paper were mostly short-term and modest, which makes the shift toward longer maturities a notable change. Financial experts gave differing explanations: some suggested Gulf-based Pakistanis could be moving liquid savings home for high-yield, risk-free returns, while others pointed to regional uncertainty tied to an ongoing war. The inflows could add to foreign exchange, which is being supported by remittances that reached a peak of $41.5bn in FY26, though weak export growth and a widening trade deficit remain concerns.