Govt plans to tap pockets of citizens overseas to boost reserves: Reza Baqir
He said we are one of few countries in region who have provided this digital on-boarding of diaspora
KARACHI (Dunya News) – Government is planning to tap pockets of overseas citizens to boost reserves as the central bank seeks to tap a new pool of savings to boost foreign exchange reserves.
State Bank of Pakistan Governor Reza Baqir said in an interview to Bloomberg that government is allowing non-resident Pakistanis to open digital accounts starting next week to allow the diaspora to invest in one of Asia’s best-performing stock markets, buy government debt and conduct basic banking services.
Eight domestic banks will facilitate opening the accounts, called Roshan Digital Accounts, which will accept deposits in either U.S. dollars or Pakistani rupees.
The SBP chairman said that Pakistan has a large diaspora and most of these are outside the financial system, adding that we are one of the few countries in the region who have provided this digital on-boarding of the diaspora.
Baqir said that the PTI government will take advantage of the digital accounts portal by launching a debt certificate for overseas investors within a few weeks, adding that the debt will be spread in five tenors including a three-month option, with return on dollar certificates ranging between 5pc and 7pc and the rupee-denominated debt between 9pc and 11pc.
“I want to emphasize on short tenor because if somebody wants to dip their toes, test the system and take money out,” he said and added we want people to do it because that’s the only way you will get confident about the system.
The SBP governor went on to say that although inflation has since surged above the central bank’s desired 7%-9% range, but he is comfortable with the outlook for inflation. Therefore, the focus remains on giving high priority to economic growth and checking unemployment. The outlook for interest rates is the prerogative of the Monetary Policy Committee, he added.
