ISLAMABAD: Broad money, or M2, which is the primary gauge of money supply in Pakistan, declined by Rs446.05 billion week-over-week, reaching Rs35.39 trillion as of July 12, 2024. This data is based on provisional accounts from the State Bank of Pakistan (SBP) on Monetary Aggregates.
Compared to June 2024, M2 has fallen by Rs1.17 trillion, down from Rs36.56 trillion recorded at the end of the previous fiscal year.
Analyzing M2’s components, currency in circulation as of July 12, 2024, decreased by Rs5.84 billion week-over-week to Rs9.27 trillion. However, in the current fiscal year, currency in circulation has increased by Rs117.57 billion compared to Rs9.15 trillion at the end of June 2024.
The proportion of currency in circulation relative to M2 was 26.2%, up from 25.89% the previous week and 25.04% in June 2024.
Total bank deposits stood at Rs25.97 trillion, showing a week-over-week decrease of Rs434.56 billion and a year-to-date decrease of Rs1.27 trillion.
It is important to note that bank deposits exclude inter-bank deposits, government deposits, and deposits from foreign entities.
Currency in circulation includes the total amount of banknotes and coins held by the public and financial institutions. In Pakistan, M2 is the most commonly used measure of broad money.
From the liability perspective, M2 encompasses currency in circulation, total non-government sector deposits (including residents’ foreign currency deposits), and other deposits held with the SBP.
On the asset side, M2 comprises the net domestic assets and net foreign assets of the banking system, including the SBP and scheduled banks.
