Pakistan’s domestic bond market faced renewed pressure in March as foreign investors withdrew $184.3 million within the first 13 days, reflecting rising caution amid escalating tensions in the Gulf region.

According to data released by the State Bank of Pakistan, sentiment deteriorated sharply, highlighted by a single-day outflow of $20 million on March 13.

The United Kingdom led the withdrawals with $69.5 million, followed by investors from Bahrain, the United States, Singapore, the United Arab Emirates, and Australia.

In comparison, inflows remained subdued at just $19.3 million, primarily originating from the UK and Bahrain, underscoring a clear imbalance between investment and capital flight during the period.

Although Pakistan is not directly involved in the ongoing conflict, the data points to heightened global risk aversion impacting local financial markets. Despite this, the country has so far maintained relative stability in its exchange rate and avoided significant oil-related shocks.

Analysts caution that a prolonged regional conflict could increase financial strain. However, remittance flows have remained steady, suggesting that overseas Pakistanis—particularly those based in Gulf countries—have yet to significantly alter their financial behavior.