Foreign currency inflows from overseas Pakistanis through Roshan Digital Accounts (RDA) fell to a 23-month low of $146 million in October 2022, a local brokerage house, citing data from the central bank.
These inflows stood at $266 million in October 2021. October gross inflows are the lowest monthly inflow since December 2020, according to Arif Habib Limited Research.
RDA funds have decreased recently, according to analysts, as a result of worries about the economy, rising interest rates abroad, and flat USD returns on Naya Pakistan Certificates (NPCs).
The State Bank of Pakistan (SBP) should raise the USD returns in line with changes in global rates in order to boost flows.
“The SBP needs to raise rates on dollar NPC, if this funding source has to be exploited. When NPC rates were initially decided the spread of one-year NPC over one-year US treasury and one-year LIBOR (London interbank offered rate), was around 6 percent.
Now it’s less than 2 percent,” said Fahad Rauf, the head of research at Ismail Iqbal Securities.
Since the launch of RDA 26 months ago, the country has received a total of $5.3 billion from the Pakistani diaspora living abroad. This scheme was launched to give the expatriates access to the local financial market.
From September 2020 to October 2022, non-resident Pakistanis (NRPs) from 175 different countries opened the 485,873 RDAs, according to the SBP’s data.
For all the latest updates and news, visit CxO Global FORUM.
