Pakistan’s broad money (M2) supply increased to Rs41.63 trillion, posting a week-on-week rise of Rs346 billion, according to data compiled by Optimus Capital Management. On a fiscal year-to-date basis, M2 has expanded by Rs838 billion, while calendar year-to-date growth stands at Rs346 billion.
On an annual basis, broad money recorded an increase of Rs6.01 trillion, driven mainly by stronger deposit mobilisation and balance-sheet expansion in the banking sector. Total bank deposits rose to Rs30.66 trillion, increasing by Rs367 billion during the week and by Rs4.22 trillion compared to the same period last year.
In contrast, currency in circulation declined by Rs27 billion on a weekly basis to Rs10.92 trillion, indicating a partial shift away from cash holdings. As a result, currency in circulation as a share of M2 eased to 26.2 percent, down 0.3 percentage point week-on-week, though it remains 0.6 percentage point higher on a year-on-year basis.
On the asset side, net foreign assets of the banking system improved by Rs102 billion during the week to Rs880 billion, contributing positively to monetary expansion. Net domestic assets increased by Rs243 billion to Rs40.75 trillion, largely supported by strong private sector credit growth.
Credit to the private sector rose sharply by Rs412 billion during the week, taking total outstanding credit to Rs10.76 trillion. Islamic banks led the incremental credit expansion, while conventional banks recorded moderate growth.
Meanwhile, net federal government borrowing declined by Rs66 billion on a weekly basis to Rs37.16 trillion, reflecting either fiscal restraint or increased reliance on non-bank financing sources.
