KARACHI: The rate of profit on savings accounts will rise 1.5 percentage points to a low of 7.25% by December 1, the State Bank said on Monday.
The announcement came after the central bank raised the policy rate last week to 8.75% from 7.25%.
The central bank, via a social media platform, also asked customers to file a complaint with their bank if it was making less profit on the savings account.
In the event of non-compliance by the bank, the SBP asked depositors to contact its customer complaints assistance service.
To open a savings account, the SBP invited customers to go to the bank of their choice. From January 2022, it became mandatory for banks to provide the ability to open bank accounts digitally with biometric verification remotely and without a customer needing to visit a bank branch.
The SBP also clarified that inflation forecasts are 5-7% for the current fiscal year and not 7-9% as being interpreted in certain sections of the media.
“In some sections of the media, SBP’s average inflation forecast of 7-9% for FY22 is interpreted as the ‘inflation target’ and compared to inflation targets in other countries. This is incorrect, ”the central bank said in a press release on Monday.
“SBP’s inflation forecasts represent our projections for the current year. On the other hand, Pakistan’s inflation target is set by the government and is 5-7 pc. This objective must be achieved in the medium term, ”said the SBP. “Monetary policy is anchored on achieving the government’s inflation target over the medium term, that is, over the next 18 to 24 months.
Ismail Iqbal Securities’ Fahad Rauf said the inflation targeting regime, as indicated by the IMF, would be at the center of monetary decision-making by the central bank.
The SBP amendment bill, which has yet to materialize, also highlights the central bank’s goals such as price stability, financial stability and economic development, he said.
Mr Rauf believed that given the current inflation outlook, interest rates would rise another 100 to 150 basis points to reach slightly positive rates.
Posted in Dawn, November 23, 2021