Bank deposit rate falls to 5% in Oct

November 19, 2025 (MLN): The return on bank deposits has decreased by 18 basis points to 5.10% in October 2025 compared to the deposit rate of 5.28% last month, according to the latest official data.

On a yearly basis, the weighted average rate paid for deposits by the banking sector has decreased by 1,094bps compared to the return of 16.04% last year.

Meanwhile, the lending rate for all scheduled banks stood at 11.69%, down 13bps compared to September. While it fell 366bps compared to the same month of last year.

Since the last three months, Pakistan's real interest rate dynamics have shifted decisively into positive territory, reflecting the combined impact of moderating inflation and a tight monetary stance.

The real deposit rate, which was deeply negative at -6.39% in October 2024, has climbed to 1.82% in October 2025, despite easing slightly from 1.94% in September 2025.

This transition from negative to positive real returns indicates a restoration of saver confidence, as bank deposits now preserve purchasing power rather than erode it.

Similarly, the real lending rate has surged from -1.39% a year earlier to 8.41% in October 2025, marginally higher than 8.34% in September 2025.

The steep rise points to restrictive financial conditions, where borrowing costs remain significantly above inflation.  

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