Investor Panic Triggers $20 Million Outflow from Pakistan Bonds in Single Day

Pakistan’s domestic bond market has come under pressure as foreign investors pulled out $184.3 million during the first 13 days of March following escalating tensions in the Gulf.

Data released by the State Bank of Pakistan shows that investor sentiment weakened sharply, with $20 million withdrawn from domestic bonds in a single day on March 13.

The United Kingdom led outflows with $69.5 million, followed by Bahrain, the United States, Singapore, the UAE and Australia.

In contrast, inflows remained limited at just $19.3 million, coming mainly from the UK and Bahrain, indicating a clear imbalance between investment and withdrawals during the period.

Despite Pakistan not being directly involved in the conflict, the data suggests that global risk aversion has impacted local markets. However, the country has so far remained relatively stable in terms of exchange rate and oil-related shocks.

Analysts warn that a prolonged conflict could intensify financial pressures, though remittance inflows have remained steady, suggesting overseas Pakistanis in the Gulf have not yet reacted significantly to the situation.