The international confidence in Pakistan’s
economy has been restored after adoption of several reforms such as shift to a
market based exchange rate system.
statement on Monday, the State Bank of Pakistan (SBP) spokesman dismissed the concept that foreign investors
are luring to Pakistan’s debt instruments on account of double digit interest
surge of investment by foreign investors in debt instruments is a positive sign
for Pakistan economy, he claimed.
international investors have started investing in debt instruments issued by
the Government of Pakistan. This is largely a manifestation of their growing
confidence in the positive outlook for the economy. As endorsed by
international financial institutions, including the IMF, the ADB and the World
Bank, and rating agencies, our reform program is beginning to show
results,” the spokesman said .
bond market has become a profitable option for foreign investors, with
sovereign bonds witnessing an unprecedented inflow of foreign money and global
investors having purchased 1-year bonds worth $642 million in November alone.
bonds offer high returns, Pakistan’s central bank has more than doubled its
policy rate to 13.25pc – the highest in Asia – to help stabilize the economy.
The foreign inflow in bonds is expected to reach a record $3 billion by the end
of the fiscal year.
spokesman said that the international
confidence has been restored after adoption of several reforms i.e. the shift
to a market based exchange rate system “which has addressed previous concerns
regarding the sustainability of the exchange rate regime,” alongside
improvement in Pakistan’s balance of payments and reserve buffers.
the concept that foreign investors are luring to Pakistan’s debt instruments on
account of double digit interest rate. “Interest rates have been higher in the
past—for example interest rates were around 13.75 percent on average in
FY11—but our debt markets did not attract interest from international
investors,” said the central bank