Cash in circulation in Pakistan has climbed to approximately Rs9.4 trillion, reflecting a significant rise in liquidity as demand for physical currency continues to grow despite the global trend toward digitisation.
The latest data from the State Bank of Pakistan (SBP) indicates that Broad Money (M2) stood at Rs34.9 trillion as of January 17, 2025, reflecting a year-on-year increase of Rs2.7 trillion. Within this, Cash in circulation has steadily grown, now contributing 26.9% of Broad Money with a value of Rs9.376 trillion.
Since mid-2023, Cash in circulation has demonstrated a persistent upward trend, rising from Rs9.1 trillion in June 2023 to its current level. Despite advancements in digital banking, the share of Cash in circulation in broad money remains steady at around 26%-27%, underscoring a continued reliance on cash for economic transactions.
Experts highlight that the increase in Cash in circulation points to liquidity pressures in the economy and challenges in formalising financial transactions.
The trend reflects a rising dependence on cash amidst broader monetary expansion, raising questions about policy adjustments and strategies for strengthening banking penetration.
