By Chathushka Perera
Islamabad, Pakistan (CWBN)_ According to Pakistan’s central bank (State Bank of Pakistan), foreign investors pulled out around USD 471 million from Pakistan’s debt market over the last five months.
Executive-Director of BMA Capital Management, a financial institution based in Karachi, Sindh, said that the “The withdrawals could be because rates are close to an all-time and not lucrative enough for investors.”
Currently, the average yield is around 7 percent and is expected to repair its momentum by 1 to 2 percent by June 2021. The 7 percent rate was imposed by the central bank in March, just before the country went in to a lockdown to curb the rapid spread of Covid-19.
Even though, the government announced on Friday (27th) that the PKR would remain stable and that economic growth rates are improving, it follows a negative 1.9 percent growth rate in the previous fiscal year (July 2019 – June 2020) and negative 1.5 percent thus far into the 2020 fiscal year.
The Covid-19 pandemic is also blamed for the severe decline in growth from 5.53 percent recorded in 2018, a value that was indicative of progress from 2.58 recorded in 2010.
Nonetheless it remains reasonable to presume that the Pakistani economy would recover in the next half of the fiscal year, provided that additional lockdowns are not imposed.
