September 15, 2023 (MLN): SBP has upward revised the rates on NPCs (vs. previous ones):
Currency | Rate of return (Gross annual return before tax) | ||||
---|---|---|---|---|---|
3M | 6M | 1Y | 3Y | 5Y | |
USD | 8.25% | 8.50% | 9.00% | 8.00% | 8.00% |
PKR | 21.00% | 21.25% | 21.50% | 17.50% | 15.00% |
GBP | 7.25% | 7.50% | 8.00% | 7.50% | 7.50% |
Euro | 6.25% | 6.50% | 7.00% | 6.50% | 6.50% |
Minimum Investment: 1,000 with integral multiples of 500
Better late than never. Your author has repeatedly argued for increasing the returns offered on NPC (both Rupee & USD ones). Stuck in a tight spot of hefty debt repayments, every million-dollar counts.
While this is no fundamental solution to the problem, increasing $ flows can stabilise much-needed FX markets. Don't forget it will be repaid.
Peak amounts in NPC (Islamic & conventional) touched USD 1.4 billion on Feb 22 compared to today's USD 700 million. Marked deceleration results from rising global interest rates and downward-trending economic conditions.
One can expect an additional USD 50-100m monthly until returns are revised downwards. A marginal path towards stability to make SBP's lives easier.
Overseas Pakistanis should keep their cash/savings in Pakistan NPCs, a tremendous success since Dr. Baqir's days. Use it as your savings account in any normal bank.
For those expecting less than 12% depreciation in the next 12 months, go for PKR returns on 1-year instruments.
Other high-net-worth individuals must assess Pakistan's global bonds, still yielding juicy 20% returns. Low-risk fixed income is triumphing over risky equity markets.
The author is an independent economic analyst and writes on Twitter and Linkedin.
Posted on:2023-09-15T16:08:36+05:00
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