The caretaker Government of Pakistan has once again slashed the interest rates on various national savings schemes, marking the third consecutive month of reductions. This move has stirred concerns among investors and savers alike, impacting millions reliant on these schemes for financial stability. According to media reports, the latest adjustments include reductions across multiple schemes. For instance, the Special Savings Certificate now offers a diminished interest rate of 15.6% for the initial six months and 16.6% for the subsequent period, down from the previous 16%. Similarly, the Defense Savings Certificate's annual profit has been curtailed to 12% from 14.22%. The Regular Income Certificate sees a drop to 14.6% from 15%, while Behbood Savings and Pensioners Benefit Account, along with Shahada Family Welfare Account, now offer an annual profit of 15.36%, down from 16.08%.

Moreover, rates on short-term savings certificates and Sarwa Islamic Term Accounts have been reduced, while the interest rate on savings accounts remains stagnant at 20.50%. These adjustments are expected to affect numerous Pakistanis who rely on these schemes for investments and income. The lowered returns might deter further investments, potentially impacting the government's financial mobilization efforts. The government attributes these cuts to endeavors aimed at curbing inflation and stabilizing the economy. However, amidst escalating living costs and economic uncertainties, the decision poses a delicate balance for the authorities. The effectiveness of these reductions in achieving their intended objectives remains to be seen. The caretaker government's actions will be closely monitored by the incoming administration, tasked with deciding the trajectory of these policies.

Credit: Independent News Pakistan (INP)