Karachi, February 21, 2024 – In a move signaling the third consecutive downward revision in the last two months, Pakistan has announced a reduction in profit rates on various savings schemes.
The Central Directorate of National Savings (CDNS) confirmed the adjustment, impacting several key schemes and reflecting the nation’s ongoing efforts to manage economic dynamics.
The latest revision, effective from February 21, 2024, sees reductions in profit rates across multiple savings instruments, ranging from 36 basis points (bps) to 72 bps.
Here is a breakdown of the revised profit rates on selected savings schemes:
1. Special Savings Certificates (SSC):
• Previous Rate: 16%
• Revised Rate: 15.6%
• Decrease: 40 bps
2. Defence Saving Certificates (DSC):
• Previous Rate: 14.22%
• Revised Rate: 13.67%
• Decrease: 55 bps
3. Short Term Savings Certificates (STSC):
• Previous Rate: 20.34%
• Revised Rate: 19.76%
• Decrease: 58 bps
4. Regular Income Certificates (RIC):
• Previous Rate: 15%
• Revised Rate: 14.64%
• Decrease: 36 bps
5. Bahbood Savings Certificates (BSC), Pensioners Benefit Account (PBA), Shuhada Family Welfare Account:
• Previous Rate: 16.08%
• Revised Rate: 15.36%
• Decrease: 72 bps
Notably, the rates for the Saving Account, Sarwa Islamic Term Account, and Sarwa Islamic Saving Account remain unchanged.
This move comes amid a broader economic landscape and follows the State Bank of Pakistan’s (SBP) decision to maintain the key interest rate at 22% during its recent monetary policy committee meeting. While the key interest rate remains constant, there is a growing consensus within the financial community that rates may see a reduction in the near future.
The downward adjustments in profit rates on savings schemes are strategic measures aimed at aligning financial instruments with prevailing economic conditions. These revisions impact a spectrum of investors, including those relying on fixed-income instruments for savings and retirees dependent on interest income.
The CDNS, responsible for administering national savings schemes, continually evaluates and adjusts rates to navigate economic challenges, manage inflation, and promote stability in the financial system.
As the country anticipates potential changes in key interest rates, stakeholders and investors are closely monitoring economic indicators for insights into the direction of monetary policy and its impact on the broader financial landscape.
In conclusion, the recent reduction in profit rates on various savings schemes underscores Pakistan’s proactive approach to economic management. While adjustments may pose challenges for some investors, they are crucial for maintaining a balanced financial ecosystem. As economic dynamics evolve, market participants will remain vigilant for potential shifts in policy and their implications on savings and investment strategies.
