Pakistan savings rates decline by up to 122bps

The profit rates of Pakistan's National Savings have decreased by up to 122 basis points, mainly due to a decline in the cut-off yields of Pakistan Investment Bonds (PIBs).

Inflation, which peaked at 37.97% in May 2023, eased to 9.64% in August this year, is expected to go further down to 7.50% in September.

This easing is driven by lower food inflation and a high-base effect. In response, the State Bank of Pakistan lowered the policy rate from its peak of 22%.

The largest drop in savings profit rates was observed in the Serwa Islamic Term Account, which fell by 122 basis points to 16.36% as of September 12.

As of July, the stock of Savings Schemes stood at PKR 2,725 billion, categorized by the State Bank of Pakistan as unfunded debt, accounting for 5.7% of the total central government domestic debt.