EDITORIAL: Amid the oil price shockwave, the need to create foreign exchange buffers is imperative for Pakistan, whose central bank reserves are barely covering three months of imports. This is especially important at a time when a USD 1.2 billion commercial bond payment is due next month, and it is extremely hard to secure new commercial financing from the Gulf region, which is engulfed in a war.
Money is likely to move out of the Middle East. As per an S&P report, if the war worsens, there is a risk that USD 307 billion in deposits may fly out of Gulf banks. That money is likely to seek safe havens. Depending on the risk profile and origin, it could land anywhere in the world.
Pakistan might be hoping to get its share, as other avenues are drying up. The country needs to be innovative. So far, Pakistan is taking a balanced position in relation to the conflict while remaining close to Saudi Arabia and enjoying cordial relations with the US. Iran is also acknowledging Pakistan’s diplomatic efforts and has recently allowed an oil ship routed to Karachi to pass through the Strait of Hormuz.
However, the issue is that despite ensuring supply, the country may run short of dollars in a few months if the crisis continues. In response, the SBP has promptly expanded the investor base for Roshan Digital Accounts (RDA). Since its launch in 2020, only non-resident Pakistanis were allowed to open these accounts and invest in Naya Pakistan Certificates and other instruments.
So far, over 900,000 non-resident Pakistanis have opened RDA accounts, with gross inflows of USD 12.2 billion, out of which only USD 2 billion has been repatriated. Investment in NPCs stands at USD 2.4 billion.
Now the SBP is expanding the base. Apart from non-resident Pakistanis, foreign nationals and institutional investors can also invest through it. The NPC offers a lucrative return comparable to commercial bond rates, with investors able to exit at any point without any discount. Right now, Pakistan’s Eurobonds are trading at a steep discount, and exit is costly for investors. That would not be the case for RDA investors in NPCs.
It may essentially become an alternative to the SCRA (Special Convertible Rupee Account), through which foreign and local individuals and institutions registered outside Pakistan can invest in Pakistan’s equity and debt instruments, with the allowance to redeem money any time they liquidate the asset.
The compliance requirements for SCRA are lengthy, and the most difficult part is assessing the ultimate beneficial owner. RDA, on the other hand, would be simpler, with account opening and investing being less cumbersome. Plus, investors can earn USD-based returns without taking currency risk.
Pakistan needs external financing, and its oil and oil derivative import bill is bound to grow. Global financial markets are demanding extremely high premiums due to rising risks. The fate of the UAE deposits is also unclear. Given all this, the opening of RDA to all types of investors is a welcome move.
Copyright Business Recorder, 2026
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