In the week ending June 28, 2024, Pakistan’s broad money supply (M2) increased significantly, climbing by Rs1.27 trillion to reach Rs36.4 trillion, according to provisional data from the State Bank of Pakistan (SBP). This surge marks a substantial year-over-year rise of Rs4.88 trillion compared to the Rs31.52 trillion recorded at the close of the previous fiscal year.
Breaking down the components of M2, currency in circulation within the economy as of June 28, 2024, decreased by Rs282.4 billion week-on-week to Rs9.11 trillion. Over the current fiscal year, currency in circulation has decreased by Rs34.33 billion from the Rs9.15 trillion recorded at the end of June 2023. As a percentage of M2, currency in circulation stood at 25.04% compared to 26.75% the previous week and 29.02% in June 2023.
Total deposits with banks were recorded at Rs27.13 trillion, reflecting a week-on-week increase of Rs1.53 trillion and a fiscal year-to-date increase of Rs4.87 trillion. Notably, these deposits exclude inter-bank deposits, government deposits, and foreign constituents’ deposits.
Currency in circulation refers to the total amount of banknotes and coins held by the general public and financial institutions. In Pakistan, M2 serves as the principal measure of broad money, encompassing currency in circulation, total deposits of the non-government sector (including residents’ foreign currency deposits), and other deposits held with the SBP.
M2 is evaluated from the liability side as the sum of currency in circulation and total deposits of the non-government sector, and from the asset side as the sum of net domestic assets and net foreign assets of the banking system (comprising the SBP and scheduled banks).
