The Government of Pakistan on Friday increased the markup rates for investments under the Naya Pakistan Certificate (NPC), ostensibly to attract foreign direct investment into the country amidst an economic crunch.
The NPC offers risk-adjusted returns over different maturities in sovereign instruments issued by the Government of Pakistan. In addition to the national currency, it is also denominated in foreign currencies, specifically U.S. dollars, British pounds and euros. The investments are offered in both conventional and Shariah-compliant versions and are administered by the State Bank of Pakistan.
In a notification issued on Friday, the Ministry of Finance increased the rates for NPCs, saying that for U.S. dollars, investment of $1,000 for three months would now fetch a rate of return of 7 percent, compared to 5.5 percent earlier. For six months, the new rate would be 7.2 percent against the earlier 6 percent. An investment of 12 months would fetch 7.5 percent rate of return compared to the earlier 6.5 percent, while three- and five-year investments would both net 8 percent compared to the earlier 6.75 percent and 7 percent, respectively.
For an investment of £1,000, the rate of return for three months has been raised from 5.25 percent to 5.5 percent; from 5.5 percent to 6 percent for six months; from 5.75 percent to 7 percent for 12 months; and 7.5 percent for both three- and five-year investments, compared to the respective 6.25 percent and 6.5 percent earlier.
On the investment of €1,000 in the NPC, the government is now offering 4 percent rate of return for three months against 4.75 percent earlier; 4.5 percent for six months against the previous 5 percent; 5 percent for 12 months compared to the earlier 5.25 percent; and 6.5 percent for three- and five-year investments against the previous 5.5 and 5.75 percent, respectively.
The rate of return for deposits in Pakistani rupees of Rs. 10,000 will remain unchanged at 15 percent for three months; 15.25 percent for six months; 15.5 percent for 12 months; 14 percent for three years; and 13.5 percent for five years.