LAHORE/KARACHI (Web Desk) – The State Bank of Pakistan (SBP) says the bank deposits in the country had reached the highest level in its history amid the steep interest rate hikes, offering an attractive return on their savings.
The latest SBP data shows that the bank deposits in October had jumped to Rs26.398 trillion, which represents an 18 per cent increase when compared with the last year earlier.
But the record-high interest rates aren’t the sole reason that encouraged people to keep their money in the banks as the remittance from overseas workers have also witnessed a 11.5pc month-on-month increase to $2.5 billion in October. The total for September was $2.208bn.
Another factor contributing to the trend is the government crackdown on illegal currency trading and market manipulation, which had earlier reinforced the US dollar as the obvious safe-haven currency, due to the rupee devaluation.
Hence, the government action meant that the people were forced to convert the stashed foreign currencies into rupees and deposit them in banks due to the high interest rates – an immediate solution given the persistent inflation.
But one has to see whether the latest trend continues by November-end after the government crackdown lost its steam last and the dollar appreciated back to Rs287.03 on Friday (November 12) after the rupee had impressive recovery from a record low of Rs307.10 to Rs276.83 by Oct 16.
Since then, the local currency has depreciated by Rs10.2 – a massive disappoint for those who were expecting the rupee to reach Rs250 in official exchange rate against the dollar.