RDA inflows fall 19.5pc to $161m in July

KARACHI: Inflows received through Roshan digital accounts (RDA) decreased by 19.5 per cent to $161 million in July, according to data from the State Bank of Pakistan released on Wednesday.

During July, $14 million in RDA funds were repatriated, while $122 million was utilized locally.As per the SBP’s data, Pakistan received gross inflows of $8.42 billion under the RDA from its launch in September 2020 to the end of July 2024.

The RDA is an admirable initiative aimed at generating foreign currency deposits and serving as a reliable funding source. These inflows support the nation’s foreign exchange reserves and aid in the repayment of its foreign debt, leading to a strengthening of the Pakistani rupee relative to the dollar.

The SBP’s foreign exchange reserves stood at $9.27 billion as of August 9.However, compared with the last six months’ average of $180 million, the RDA’s gross inflows on a monthly basis are declining. This decline can be attributed to the beginning of the monetary policy easing cycle.

Last month, the SBP reduced its key interest rate by 100 basis points (bps) to 19.5 per cent, marking the second consecutive rate cut. As a result of these two cuts, the overall rate has been reduced by 250bps since the last meeting in June.

Out of the total $8.416 billion in funds received between September 2020 and July 2024, $1.624 billion has been repatriated, and $5.334 billion has been used locally. The net repatriable liabilities consequently stayed at $1.46 billion.

Non-resident Pakistanis can digitally open a bank account in Pakistan using RDA from any location in the world. They can also send investments and remittances from overseas to Pakistan using this account. Both international and local currencies can be used to open these digital accounts.

Customers can invest using both conventional and Islamic Naya Pakistan certificates, which are provided by the Pakistani government, once their account has been authorized. Investments can also be made in Islamic savings and term certificate products offered by banks, as well as the local stock market.

According to the SBP, a total of $1.01 billion in net investments were made through the RDA between September 2020 and July 2024. Out of this amount, $357 million was invested in conventional Naya Pakistan Certificates (NPCs), while $618 million was invested in Islamic NPCs.

Moreover, $39 million was invested in the stock market, with other liabilities totalling $32 million. Net repatriable liabilities amounted to $1.46 billion, and the account balance stood at $411 million.