Pakistan raises savings account profit rates


Pakistan raised savings account profit rates from 12.25% to 13.50% annually.

The Central Board of National Savings (CDNS), the authority responsible for managing savings schemes in Pakistan, has announced the increase in profit rates on various schemes.

READ MORE: Pakistan raises policy rate by 125 basis points to 15%

According to Arif Habib Limited, the authority announced the increase in profit rates for two schemes.

The profit rate for savings accounts has been increased by 125 basis points, from 12.25% to 13.50%.

Similarly, the profit rate was increased by 24 basis points for ordinary income certificates, from 12.36% to 12.60%.

However, the profit rates of the other regimes remained unchanged. The profit rates for the other scheme are as follows: Defense Savings Certificate at 12.40%; Behbood savings certificate at 14.16%; Special savings certificates at 13%; and Retirement Benefits Account at 14.16%.

READ MORE: Pakistan could see another 100 basis point hike in its policy rate

The increase in savings plan profit rates was announced after the key rate was raised to 15%.

On July 7, 2022, the State Bank of Pakistan (SBP) announced an increase in the policy rate by 125 basis points to 15%.

This combined action continues the monetary tightening underway since last September, which aims to ensure a soft landing for the economy in an exceptionally difficult and uncertain global environment. It should help cool economic activity, prevent an unanchoring of inflation expectations and provide support to the rupee in the wake of multi-year high inflation and record imports.

However, several unfavorable developments overshadowed this positive news. Globally, inflation is at multi-decade highs in most countries and central banks are reacting aggressively, leading to depreciation pressure on most emerging market currencies.

READ MORE: SBP raises its interest rate by 150 bps to 13.75%

“This strong monetary tightening has come despite concerns about slowing global growth and even recession risks, underscoring the primacy that central banks place on controlling inflation at this stage,” the SBP said. .

Domestically, as energy subsidies were reversed, headline and core inflation rose significantly in June, reaching a 14-year high. Consumer and business inflation expectations have also risen sharply.

Meanwhile, the current account deficit unexpectedly spiked in May and the trade deficit continued its widening trend after March to hit a 7-month high in June, driven by surging imports of energy. As a result, foreign exchange reserves and the rupee remained under pressure, further worsening the inflation outlook, the central bank added.

READ MORE: Policy rate could rise as Treasury yields rise sharply


Comments are closed.