RDA inflows dip to $161m in July

July sees lower deposits as rupee faces pressure from delayed IMF approval

KARACHI:

Overseas Pakistanis deposited and invested $161 million in July 2024 through the Roshan Digital Account (RDA), a figure below the past six-month average, contributing to a Rs0.18/$ decline in the domestic currency in the inter-bank market on Wednesday.

According to State Bank of Pakistan (SBP) data, these inflows have pushed total RDA receipts to $8.42 billion since the accounts were introduced in September 2020. Net inflows currently stand at $1.46 billion, excluding funds expatriates sent to and later withdrew from Pakistan.

Topline Research noted that July's inflows of $161 million were lower than the six-month average of $168 million and the overall average of $179 million since RDA's launch. Net inflows were $147 million in July, compared to a six-month average of $168 million and a 47-month average of $144 million, said the research house.

SBP data indicates that non-residents have spent $5.33 billion locally and withdrawn $1.62 billion, totalling $6.96 billion in outflows from the $8.42 billion in gross inflows. Of the current net repatriable funds of $1.46 billion, overseas Pakistanis have invested $357 million in Naya Pakistan Certificates (NPCs), $618 million in Shariah-compliant NPCs, and $39 million in the Pakistan Stock Exchange. They also maintain a balance of $411 million in online accounts at Pakistani banks, with other liabilities at $32 million, shows the data.

The SBP did not provide a reason for the drop in inflows, but analysts suggest political instability and reports of a potential delay in the International Monetary Fund (IMF) Executive Board's approval of a $7 billion bailout package until September 2024 may be contributing factors.

These developments, along with the decrease in RDA inflows and the IMF programme delay, have pressured the rupee. Financial experts warned that the rupee would be affected by any delay in the new loan program, as the IMF Board awaits the rollover of $12 billion in deposits at SBP from friendly countries, including Saudi Arabia and China.

The Exchange Companies Association of Pakistan (ECAP) reported that the local currency appreciated by Rs0.20 day-to-day, closing at Rs280/$ in the open market.