Over the past few years, overseas Pakistanis have been increasingly investing in their home country through the Roshan Digital Account (RDA) scheme. In May 2024, the net investment reached a remarkable two-year high of $215 million, bringing the total gross receipts under the RDA to a historic level of $8.05 billion since the scheme was launched in September 2020.
This surge in investment has had a positive impact on the Pakistani economy, leading to the appreciation of the Pakistani rupee by Rs0.08 against the US dollar in the inter-bank market. The State Bank of Pakistan (SBP) reported that non-resident Pakistanis invested a total of $224 million in May, with $215 million being the net inflow after taking into account funds that were either utilized in the country or withdrawn.
The increase in RDA inflows reflects the growing confidence of expatriate Pakistanis in the national economy, particularly following the general elections in February 2024, which brought a sense of political stability. Factors such as a stable exchange rate between the Pakistani rupee and the US dollar, attractive returns on Naya Pakistan Certificates (NPCs), and ongoing discussions for a new IMF loan program have also contributed to the rise in investments.
Out of the total gross inflows of $8.05 billion, it is estimated that $1.39 billion can be repatriated as net liability under the RDA scheme. Of this amount, $338 million has been invested in NPCs, $582 million in Shariah-compliant NPCs, $37 million in the Pakistan Stock Exchange, and $470 million has been kept in bank accounts.
The continuous flow of investment through the RDA has not only provided much-needed foreign currency for Pakistan’s economy but has also supported the stability of the Pakistani rupee. This steady influx of funds from overseas Pakistanis demonstrates their commitment to contributing to the development and growth of their home country.
As the RDA continues to attract investments and facilitate financial transactions for overseas Pakistanis, it is expected to play a crucial role in bolstering the country’s economy and strengthening its foreign exchange reserves. The government and relevant authorities must continue to support and promote initiatives like the RDA to encourage further investment and economic growth in Pakistan.