RDA inflows jump 17pc to $160m in December

KARACHI: In over three years since its launch in September 2020, Roshan Digital Account (RDA) has emerged as a significant source of foreign inflows, reaching $7.195 billion by the end of December 2023.

According to the State Bank of Pakistan’s data released on Monday, the inflows in December were $160 million marking a much better performance compared to other months. The inflow was 17 per cent higher than the $137m received in November 2023.

Under the RDA facility, non-resident Pakistanis (NRPs) can remotely open accounts with designated Pakistani banks and operate through an online system for banking services such as transferring money, making payments for utilities, education, and other services, and investment in Pakistan.

Since its introduction, the facility has been attracting a large amount of inflows with a monthly average of above $200m.

Attracts total $7.2bn since launch; repatriable amount stands at $1.21bn

All the inflows and outflows from RDA are recorded in the balance of payments statement of Pakistan they impact the country’s forex reserves.

The RDA provided significant relief after the shock of outflows of foreign investments from the domestic bonds.

The RDA was introduced after almost entire foreign investment in domestic bonds was withdrawn due to Covid-19. The inflows in the treasury bills and Pakistan Investment Bonds were more than $5bn but the pandemic in 2019 created panic and most of the foreign investment flew back to its origin.

The RDA was helped by the overseas Pakistanis as their investments kept increasing in Naya Pakistan Certificates (NCPs) and other options.

The SBP data showed that out of total RDA inflows, $1.538bn has so far been repatriated while $4.442bn has been utilised locally.

With the outflows and local utilisation under RDA, the net repatriable liability stands at $1.215bn as of Dec 31, 2023. Out of the total outstanding liability, an amount of $786m is with Naya Pakistan Certificates, $331m in conventional NPCs and $455m in Islamic instruments.

According to the SBP, the total number of RDA accounts opened reached 651,057 from 640,875 a month ago at November-end. The RDA started by offering 8pc profit on US dollar investment. It is more attractive for overseas Pakistanis as the return on US dollar investment is much higher than keeping the dollars in any international bank.