Pakistan withdraws $1.7bn invested in US capital market: The News

By By Mehtab Haider
ISLAMABAD: Pakistan has withdrawn around $1.7 billion invested with selected fund managers out of total $3.2 billion largely put into various tools of the US Treasury and the US capital market, The News has learnt.

Now around $1.5 billion foreign currency reserves are lying with the fund managers, market sources said and added that the reserves management had raised several questions in the past during the tenure of Musharraf-Aziz regime because the country got minimum return compared to giving huge profits to those foreign investors who purchased Pakistani papers such as eurobond and others.

However, the State Bank of Pakistan confirms that it did not pay any penalty for withdrawal of its investment funds.“Anticipating such a situation, the SBP had included terminal clauses in all investment management agreements. Therefore, the central bank can call back funds from fund managers without any notice period and without incurring any penalty. All transactions are conducted on prevailing market prices,” the SBP categorically said.

In a written reply, the SBP also confirmed that during the last four fiscal years, $1.73 billion has been accumulated through a focused investment strategy that contributed as investment income on the part of forex reserves held by the SBP.“These returns were achieved on an overall average investment portfolio of $9.71bn during the last four years, despite holding a conservative and risk adverse portfolio in turbulent global markets,” it added.

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