ISLAMABAD: The government has permitted resident Pakistanis, having offshore bank accounts, to invest in diaspora bonds, which may allow people to channel their money from offshore tax havens and foreign currency accounts maintained with local banks.
Pakistanis have nearly $7.5 billion in foreign currency accounts but domestic commercial banks pay less than 1% interest on these deposits. The government’s decision to allow resident Pakistanis to invest in diaspora bonds has offered an opportunity to these people to take their money abroad and bring it back through an offshore account to earn up to 6.75% interest.
The decision may promote dollarisation of the economy as resident Pakistanis, who would opt to invest in Pakistan Banao Certificates, will be paid up to 6.75% return in dollars. It will also help meet the core objective of attracting dollars from those sources that are already not part of the central bank’s reserves…read more