KARACHI: March emerged as the most beneficial month of the current financial year for the country, as inflows from all sources increased, along with a 29 per cent rise in receipts through Roshan Digital Accounts (RDA).

The State Bank of Pakistan (SBP) reported that inflows through RDA increased by $182 million in March, up 29pc from $141m in February, bringing the total to $7.660 billion, compared to $7.478bn in the previous month. This growth is encouraging for both the SBP and the government, as they struggle to improve their payment capacity for imports and debt servicing.

The breakdown of inflows in March, as reported by the SBP, shows that out of the total inflow ($182m), $17m has been repatriated so far. The amount utilised locally during the same month was $135m, resulting in a net liability to be repatriated of about $30m.

The country has received a total amount of $7.66bn under RDA so far. This is encouraging for the government, as out of these total inflows, $4.8bn has been utilised locally. This indicates that the inflow under RDA has reduced the burden on the SBP to provide more dollars. The SBP reported that $1.576bn under RDA has been repatriated so far, leaving $1.283bn to be repatriated.

In the same month, March, the government received $3bn in remittances, much higher than February, which supported the declining foreign exchange reserves and helped the central bank maintain a stable exchange rate. Another positive report was about the inflow of foreign investment in treasury bills, which exceeded the inflow for the record-breaking equity market, reaching $20m in the first nine days of April.

The number of accounts under RDA also increased in March to 679,792 from 668,701 the previous month.

The highest amount, $840m, came for the Naya Pakistan Certificates (NPCs). According to the SBP website, $312m was in conventional NPCs and $528m in Islamic instruments.

RDA was launched to bring back the outflow of foreign investments from domestic bonds after the emergence of Covid-19. While it succeeded in attracting dollars, it did not do so at the rate or frequency with which foreign investors had turned towards treasury bills and Pakistan Investment Bonds before Covid-19. The country received more than $4.5bn in domestic bonds, but more than 90pc left the country within a few months of Covid-19.

Published in Dawn, April 26th, 2024