The State Bank of Pakistan has announced a revised remuneration rate of 3.00 percent for the Special Cash Reserve Account (US$) for the month of November 2025, marking a slight decline from the 3.27 percent rate applied in October 2025. The update was shared through the central bank’s latest circular, reaffirming its ongoing commitment to align foreign currency reserve management with international market indicators.
This remuneration rate applies specifically to deposits mobilized under FE-Circular 25 of 1998, a longstanding regulatory framework governing foreign currency deposit schemes in the country. The mechanism plays a pivotal role in determining how banks and non-bank financial institutions manage their foreign currency inflows and the associated mandatory reserve requirements.
According to the structure currently in place, financial institutions are obligated to maintain cash reserves equivalent to 25 percent of their total FE-25 deposit liabilities with the central bank. These reserves are divided into two components: a non-remunerative Cash Reserve Account comprising 5 percent of the deposits, and a Special Cash Reserve Account representing the remaining 20 percent. While the former does not earn any return, the latter is remunerated on a monthly basis based on policy rates communicated by the State Bank.
The remuneration rate for the Special Cash Reserve Account is calculated in accordance with the methodology defined under the DMMD Circular Letter No. 03 of 2023. The central bank uses the CME 1-month Term Secured Overnight Financing Rate, commonly known as SOFR, as the underlying benchmark. The rate published on the last working day of the preceding month serves as the reference point, after which a deduction of 1 percent is applied as service charges. This formula anchors Pakistan’s foreign currency reserve remuneration to a globally recognized risk-free benchmark widely used in international financial markets.
The latest downward revision reflects movement in the SOFR benchmark and highlights the central bank’s approach to keeping domestic reserve remuneration aligned with global interest rate trends. By doing so, the SBP ensures that banks operating in the country manage their foreign currency deposits under a transparent and consistent regime that mirrors international norms.
The adjustment is part of broader efforts to maintain stability in the foreign currency deposit system while enabling financial institutions to anticipate returns with greater clarity. As global financial markets continue to adjust to evolving monetary conditions, such updates enable local institutions to manage their positions more effectively.
The Special Cash Reserve Account structure remains a critical component of Pakistan’s foreign currency liquidity management framework. With monthly adjustments tied to external benchmarks, it helps create a predictable environment for banks that hold significant volumes of FE-25 deposits. The latest notification for November 2025 continues this pattern, offering clarity to the market and reflecting the central bank’s adherence to a rules-based approach for determining returns on foreign currency reserves.
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