KARACHI, Feb 26: Drying up of foreign inflows could be a threat to the country`s foreign exchange
reserves and current account balance as both foreign direct investment and portfolio investment nosedived
during the first seven months of this fiscal year.
Analysts and importers said the foreign investment may shrink further amid political turmoil and depressed
economic environment.
The State Bank of Pakistan data showed that the country witnessed steep fall in foreign investment during
the July-January period below $1 billion compared to $5.4 billion in fiscal year 2008.“The country might
not see any improvement in FDI during the coming months as economy offers no attraction while
uncertainty has strong presence on political and economic horizons,” said Mohammad Imran, a research
analyst on investment.
The new wave of panic like situation on the stock market flushed out foreign investment in the recent past,
but still it was positive.
The SBP data showed that up to February 25, 2011, the cumulative foreign inflows were $768 million,
outflows $571 million and finally $179 million still there as portfolio investment.
