Foreign portfolio investors return after receiving an IMF loan
ISLAMABAD: After the International Monetary Fund (IMF) approved a $3 billion loan program in late June 2023, short-term foreign portfolio investors restored their faith in Pakistan’s economy and began investing modest amounts in equity and debt instruments.
According to the most recent data from the central bank, foreign investments in the Pakistan Stock Exchange (PSX) and the debt market increased 19%, or just over Rs54 billion ($183 million at the current exchange rate of Rs295/$), and reached a total of about Rs344 billion ($1.16 billion), in the first seven weeks of the current fiscal year.
They had sold securities worth Rs. 29.53 billion in the previous fiscal year, bringing their total outstanding investment down by 9.25% to Rs. 289.75 billion Speaking to in June 2023. Due to political and economic unrest, foreign investors have continued to be net sellers at the PSX for the previous six years.
However, they invested a net $3.6 billion in 2019 into debt instruments like Pakistan Investment Bonds (PIBs) and T-bills. In the years that followed, in 2020 and 2021, they aggressively withdrew their investment due to the Covid-19 pandemic.
Published in EDP BLOGS on August 20,2023.
