February, 23, 2024
Pakistan: RDA Inflows Rise Despite FY23 Decline

Pakistan: RDA Inflows Rise Despite FY23 Decline

Infostani International- State Bank of Pakistan latest report unveils insights into the Remittance Declaration Scheme (RDA) inflows and trends in December 2023. The data highlights economic indicators, future projections, and factors influencing remittance patterns, providing a comprehensive overview of Pakistan’s financial landscape.

State Bank of Pakistan Reports RDA Inflows and Trends in December 2023, Revealing Economic Insights and Future Projections

The State Bank of Pakistan released data on Monday, revealing that RDA inflows stood at $137 million in November 2023, showing a 17% increase in December figures. In comparison to the same month in 2022, the current figure reflects a 14.29% rise. RDA inflows in December 2022 were recorded at $140 million.

SBP data indicates that the total RDA inflow for the calendar year 2023 amounted to $1.619 billion, marking a nearly 33% decrease from $2.416 billion in FY22. Additional data discloses that out of the total inflows of $160 million in December 2023, $7 million has been repatriated, while $120 million has been locally utilized, leaving a net repatriable liability of $34 million. The number of RDA accounts increased to 651,057 in December 2023 compared to 640,875 in November of the preceding year.

Initiated by the SBP in September 2023, RDA aims to channel cash inflows through the banking system, discouraging the traditional Hundi and Hawala networks commonly used by Pakistanis to send investments to their home country. The SBP, in a bid to incentivize the public, offers up to 8% profit on United States dollar investments in Pakistan.

Since its inception, the total inflow through RDA stands at $7.195 billion by December 2023. Out of this figure, $1.5538 billion has been repatriated, with a local utilization of $4.442 billion. As of December 2023, the total net repatriable liability stands at $1.215 billion, distributed among $786 million in Naya Pakistan Certificates, $331 million in conventional NPCs, and $455 million in Islamic instruments.

Financial Outlook and Factors Influencing RDA Inflows in Pakistan

SBP data further states that an amount of $375 million is balanced in Accounts, with an improved Roshan Equity Investments at $30 million. Financial experts attribute the 33% decline in RDA inflows in FY23 to the country’s overall economic and political situation. Global inflation is another factor impacting these decreasing inflows, as overseas Pakistanis adjust their investments based on the situation in the countries where they reside.

They also note that the economic condition in Pakistan has been stagnant for almost two years, leaving little room for the average expat to invest in the country. However, they express hope that with the arrival of a new government in a few weeks, the economic situation may improve, and RDA inflows might once again surpass the $2 billion mark in the ongoing calendar year.

On Monday, the rupee climbed to 280.24 against the US dollar, gradually stabilizing in the interbank market.