Govt reduces Naya Pakistan Certificate returns amid policy rate cuts

Lower inflation outlook prompts downward revision in profit rates

The federal government has reduced the rate of return on Conventional Naya Pakistan Certificates (NPCs), citing a sharp decline in the policy rate over the past six months. This marks the first revision in NPC returns since the State Bank of Pakistan (SBP) shifted to monetary easing in June 2024.

The SBP’s monetary policy committee implemented a cumulative 10% cut in the key policy rate, aiming to support economic growth amid a lower inflation outlook. In response, the Government of Pakistan officially announced the downward revision in NPC returns, effective February 20, 2025.

Under the revised rates, profit on 12-month NPCs in Pakistani Rupees has dropped by 8.50% to 13%, while returns on 3-year and 5-year investments have been reduced to 12.50%, previously set at 17.50% and 15%, respectively. The 3-month and 6-month NPCs now offer a 13.50% return, down from 21% and 21.25% earlier.

For US dollar investments, returns have also been lowered by up to 2%. The 3-month and 6-month rates now stand at 7%, down from 8.25% and 8.50%, respectively. The 12-month NPC return has fallen to 7% from 9%, while 3-year and 5-year investments now offer a 7.50% return, compared to 8% previously.

For investments in British Pounds (GBP), rates for the 3-year and 5-year tenors remain unchanged at 7.50%, while the 6-month and 12-month NPCs have been revised down to 7.25%. In the Euro category, returns on 3-month and 6-month NPCs have dropped to 5.25%, down from 6.25% and 6.50%, respectively. The 12-month, 3-year, and 5-year investments now offer a fixed 5.25% return.

The reduction in NPC rates aligns with the government’s ongoing monetary policy adjustments, aimed at stabilizing inflation while maintaining fiscal discipline. The revision was officially notified by the Finance Division (External Finance Wing) through Gazette Notifications S.R.O. 33(I)/2025 and S.R.O. 174(I)/2025, issued on January 16 and February 12, 2025, respectively.

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