KARACHI: Foreign currency inflows received under Roshan Digital Account (RDA) exceeded $8 billion as of May 24, the central bank reported on Friday, supporting Pakistan’s foreign exchange reserves.
“Roshan Digital Account inflow crosses US$8 billion mark. Thank you overseas Pakistanis for your unwavering support and trust,” the State Bank of Pakistan said on its social media platform X.
The SBP’s reserves have increased from $4 billion at the end of June 2023 to $9.1 billion after the successful completion of the International Monetary Fund’s $3 billion stand-by arrangement. This loan programme concluded last month.
The current account deficit of the nation is progressively getting better, reflecting the reduced trade deficit and the increase in remittances. This also supported the foreign exchange reserves. The SBP was able to make its external payments on time while building reserves because of improvement in the current account deficit and financial inflows, especially from the IMF.
This week, the data issued by the SBP showed that RDA inflows reached $7.831 billion between September 2020 and April 2024. Of the total amount received, $4.925 billion has been used locally, and $1.587 billion has been repatriated. The net repatriable liability was $1.320 billion after this.
Pakistan received $171 million in inflows from Pakistanis living abroad in April under the Roshan Digital Account (RDA), a 6 percent decrease from the $182 million recorded in the previous month.
While the RDA growth declined slightly, it may be concerning for the government and the State Bank of Pakistan, which are currently grappling with improving their ability to pay for imports and service debts.
Based on the breakdown of RDA in April, $11 million of the overall inflow ($171 million) has been repatriated so far. In the same month, $123 million was utilised locally, leaving a net liability of $37 million to be repatriated.Since its inception in September 2020, the RDA scheme has grown to become one of Pakistan's primary funding sources.
Through the use of an online system, non-resident Pakistanis (NRPs) can use the RDA facility to remotely open accounts with particular Pakistani banks and carry out banking operations such as money transfers, utility, education, and other service payments, as well as investments in Pakistan.
SBP data shows that $873 million in net investments were made through RDA between September 2020 and April 2024. $317 million was invested in conventional Naya Pakistan Certificates (NPCs), whereas $523 million was invested in Islamic NPCs. $33 million was invested in the stock market. There were additional liabilities totaling $28 million. Net repatriable liabilities totaled $1.319 billion, with an account balance of $418 million.