Further cut in Islamic savings rate

PAKISTAN: Worsening Pakistan’s already low domestic savings rate, the government announced a further cut in profit rates on various national savings schemes and certificates. The return on the Sarwa Islamic Term Account was lowered from 17.58% to 16.36%, making it a total 254 basis points (bps) cut after the 132bps reduction in August 2024. The Central Directorate of National Savings also reduced the profit rate on the Sarwa Islamic Saving Account by a percentage point, from 19% to 18%. The profit rates decline is part of a broader trend as the State Bank of Pakistan continues to lower interest rates – having cut its policy rate by a cumulative 450 bps, bringing the rate down to 17.5%.