KARACHI: Inflows through the Roshan Digital Account (RDA) dropped by 11 per cent to $200 million in June, down from $224m in May, according to the latest data from the State Bank of Pakistan (SBP). During June, $14m was repatriated, while $142m was utilised locally.

The data, released on Friday, shows that the country received $8.255 billion through RDA since its launch in September 2020 up to the end of June 2024.

The initiative was introduced to attract dollar inflows and mitigate the economic shock caused by the rapid outflow of hot money due to the Covid-19 pandemic in 2020, which saw approximately $4bn exit domestic bonds.

A significant portion of these inflows, $5.212bn, was utilised locally, providing substantial relief to the government, which has been grappling with dollar shortages.

Overall inflows surpass $8.2bn since initiative’s launch in 2020

To conserve foreign exchange, the government drastically reduced imports in the fiscal year 2022-23, leading to a contraction in growth, with continued import restrictions into FY24.

Cumulatively, about $1.6bn of the $8.2bn in overall inflows has been repatriated, with total repatriable liabilities standing at $1.4bn by the end of June 2024.

Of the total outstanding liability, $940m is held in Naya Pakistan Certificates (NPCs), including $348m in conventional NPCs and $592m in Islamic instruments.

Despite recent improvements in Pakistan’s rating by Fitch and S&P, the country remains unable to raise dollars through international bond markets.

The government is now exploring the Chinese market with the potential launch of panda bonds. However, financial experts in Pakistan believe that the timing was not suitable, stressing that the Chinese market would not respond unless Pakistan settled its debts and payments issue with Chinese investors,

The government is considering engaging marketing agencies for the Panda Bonds launch, having received bids from three Chinese and two Pakistani companies.

However, financial experts caution that these companies will be paid agents and not accountable for the success of the bonds. They emphasise that the government’s resolution of Chinese debt re-profiling issues is crucial for a positive market response.

Experts also believe that the decline in RDA inflows in June reflects increasing debt servicing challenges, which may discourage investors.

Published in Dawn, August 3rd, 2024

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

From hard to harder

From hard to harder

Instead of ‘hard state’ turning even harder, citizens deserve a state that goes soft on them in delivering democratic and development aspirations.

Editorial

Canal unrest
Updated 03 Apr, 2025

Canal unrest

With rising water scarcity in Indus system, it is crucial to move towards a consensus-driven policymaking process.
Iran-US tension
03 Apr, 2025

Iran-US tension

THE Trump administration’s threats aimed at Iran do not bode well for global peace, and unless Washington changes...
Flights to history
03 Apr, 2025

Flights to history

MOHENJODARO could have been the forgotten gold we desperately need. Instead, this 5,000-year-old well of antiquity ...
Eid amidst crises
Updated 31 Mar, 2025

Eid amidst crises

Until the Muslim world takes practical steps to end these atrocities, these besieged populations will see no joy.
Women’s rights
Updated 01 Apr, 2025

Women’s rights

Such judgements, and others directly impacting women’s rights should be given more airtime in media.
Not helping
Updated 02 Apr, 2025

Not helping

If it's committed to peace in Balochistan, the state must draw a line between militancy and legitimate protest.