(Bloomberg) -- Pakistan’s bond market is witnessing something unprecedented in November.
Global investors have piled $642.5 million into local-currency bonds this month alone, more than what they invested in the debt in the past four years, according to central-bank data going back to 2015.
Interest in the nation’s bonds has surged this year as the State Bank of Pakistan more than doubled its policy rate to 13.25% -- the highest in Asia -- over 10 meetings to help stabilize the economy. That, along with government efforts to improve public finances with support from the International Monetary Fund, has boosted the allure of the notes as the world’s pool of negative-yielding debt deepened.
Pakistan “stands out” in a low-yield global environment “following the recent rate hikes and currency adjustment - and more broadly, the reform momentum under the IMF,” said Bilal Khan, senior economist at Standard Chartered Plc in Dubai.
Foreign flows in November have all gone into Treasury bills -- which have a maximum holding period of 1 year -- with 55% of them coming from the U.K. and 44% from the U.S., the central bank data showed.
The nation’s local-debt market has not traditionally been a magnet for portfolio flows like other emerging markets and wasn’t attractive for years, said Khan, who visited fund managers in Europe last month inquiring about Pakistan.
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