June 12, 2023 (MLN): Unveiled with great expectation to attract foreign exchange reserves to financially strained Pakistan, the Roshan Digital Account (RDA) has transformed from a beacon of hope to an arduous liability.
The latest breakup of data by the State Bank of Pakistan (SBP) reveals that Pakistan is now confronted with a daunting net repatriable liability of $1.129 billion, a substantial portion of the $6.1bn inflows generated through the RDA as of April 30, 2023.
Of the $6.1bn inflows, $1.4bn was repatriated from RDA while $3.56bn has been utilized locally.
The utilized funds are no longer an obligation; however, the utilization of funds locally points out a lack of viable investment opportunities within Pakistan.
Compared to the previous month, it has increased by $7mn whereas on a yearly basis, it has decreased by 633mn from $1.76bn in April 2022. But at that time, the repatriated amount was only $493mn against the repatriated amount of $1.4bn in April 2023.
Further breakdown of the net repatriable liability showed that of $1.129bn, $334mn comes from the investments in Naya Pakistan Certificates (NPCs) conventional while the same certificates have attracted $1.89bn through RDA. An amount of $391mn has been added from NPCs Islamic in net repatriable liability from the inflows of $1.92bn, showing a substantial amount of liability coming from investments in Islamic NPCs.
In addition, Roshan Equity Investments, Balances in Accounts, and other liabilities added $18mn, $370mn, and $16mn, respectively.
Despite the aim of attracting foreign investments, the RDA has observed only a $50 million investment in the equity market, raising concerns about the level of interest and confidence among foreign investors in Pakistan's stock market, of which $18mn is contibuted to the liabilities.
It is important to mention that $3.815bn was invested in NPCs while a $50m investment has been observed in the equity market through RDA.
For the unversed, net repatriable liability is the number of funds held in RDA accounts that can be repatriated to the account holder's country of residence.
The net repatriable liability is calculated by subtracting the total amount of funds repatriated from the RDA and the number of funds utilized locally from the total funds received in the RDA.
To note, the funds utilized locally have been consumed and are no more an obligation. These include funds transfers to non-repatriable accounts, cash withdrawals, bill payments, merchant transactions, fee payments, mobile top-ups, etc.
It is important to note that earlier the data of RDA shared by SBP was used to show only the inflows whereas this month SBP revealed the breakup of inflows.
Copyright Mettis Link News
Posted on: 2023-06-12T19:11:54+05:00
