With the start of the new fiscal year, within the end of the first month, the RDA has managed to get the second-highest inflows worth $1.87 billion since it was launched last September.
The state bank of Pakistan launched RDA for non-resident Pakistanis to let them open accounts through online portals remotely. The inflow in the start was just $7 million, but now it has shown a trend of over $300 million each month according to the data released by state bank on Thursday, with $307 million in June and $310 million in July, making it reach $1.87 billion.
Through $1.8 billion inflows of RDA, there was an increase in foreign exchange reserves, as said by the governor of SBP, Dr. Reza Baqir, last month. Due to this, the foreign exchange reserves were $17.85 billion last month, which reflected a good image of Pakistan in the international market. Moreover, Govt raised an additional $1 billion through issuing of Eurobond that made $2.5 billion in March.
Even with higher inflows of remittances, improved exports, and inflows through RDA, the Pakistani rupee still depreciated by 7 percent against the US dollar in the past two months. However, the State bank of Pakistan said that Pakistan is at its strongest compared to the previous several years. Unlike the past uptrends of Pakistan’s economy, this will be accompanied by external stability, as the current account deficit also fell to 0.6 percent only of the total GDP.
On the other side, the governor said that the reserves buffers of Pakistan could rise by $2.8 billion in August due to IMF’s new global SDR allocation.
The Governor of SBP also added that the current account deficit would rise to 2-3 percent of GDP in FY2020 due to $20 billion external payments that have to be made, which is much higher than FY2019 0.6 percent of GDP. Still, it is better than 4 and 6 percent of GDP of FY17 and FY18, respectively.
