January 22, 2023 (MLN): In order to lure the dollars to the economy, the government has decided to raise the rate of return on Naya Pakistan Certificates (NPCs), which offer attractive risk-adjusted returns over different maturities by up to 1.5%, Statutory Regulatory Order (SRO) issued by the Ministry of Finance revealed.

Accordingly, the rate of return on three-month investments moved up by 1.5% to 7% while for six months NPCs, the rate has inched up by 1.2% to 7.2%.

For one, three-, and five-year investments in NPCs, the rates have been increased by 1% and 1.25%, and 1% to 7.5%, 8%, and 8%, respectively.

To note, foreign exchange inflows through Roshan Digital Account (RDA) have reached $5.57 billion by December 2022 since its launch in September 2020.

In the month of December 2022, the overseas Pakistanis deposited $140mn into RDA compared with $141mn recorded in the previous month.

As per the data, of the total $5.57bn, $3.49mn was invested in NPCs while $48 investment has been observed in the equity market through RDA.

Out of the total amount invested in NPCs, $1.77bn has been invested in conventional NPCs, whereas $1.72bn has been invested in Islamic NPCs.

Analyzing the numbers available, a few months ago, inflows of over $200mn, close to $300mn, and even in June 2021, $310mn had been added in a month. However, in a parabolic move, the inflows are shrinking gradually as the number of inflows is increasing at a decreasing rate.

Finding out the possible reasons, MG Link News approached the experts who have been closely working on RDA since its inception and received trivial responses.

“Spread amongst other investment instruments, especially in the west are getting closer thus we see less inclination of inflows through RDA,” one of the commentators unveiled.

When we take a closer look at the dollar-based and PKR-based returns offered by the instruments under RDA i.e., NPCs, it was noted that during the whole period, the rates remained unchanged while, the returns on other instruments like US treasury bills have been increasing.

Thus, the increase in the markup rates on NPCs was a mandatory step to attract dollars from other countries.

Copyrights Mettis Link News

Posted on: 2023-01-22T16:25:59+05:00