Pakistan’s currency in circulation falls as deposits rise

ISLAMABAD: Pakistan’s broad money supply (M2) increased by Rs163.25 billion week-on-week, reaching Rs37.09 trillion as of April 18, 2025, according to data from the State Bank of Pakistan (SBP).

Compared to June 2024, M2 has risen by Rs1.21 trillion from Rs35.88 trillion at the end of the previous fiscal year.

Breaking down the components of M2, currency in circulation saw a decline of Rs69.73 billion week-on-week, settling at Rs10.15 trillion as of April 18. However, when compared to June 2024, currency in circulation has increased by Rs992.5 billion from Rs9.15 trillion.

As a percentage of M2, currency in circulation stood at 27.35 per cent, slightly down from 27.66 per cent the previous week but up from 25.51 per cent in June 2024.

Meanwhile, total deposits held by banks amounted to Rs26.89 trillion, showing a week-on-week rise of Rs233.25 billion and an increase of Rs227.17 billion year-to-date.

It is important to note that these deposits exclude inter-bank deposits, government deposits, and foreign constituent deposits.

Currency in circulation refers to the stock of banknotes and coins in the economy, held by the public and financial institutions.

M2, the most commonly used measure of money supply in Pakistan, is calculated on the liability side as the sum of currency in circulation, total deposits of the non-government sector (including foreign currency deposits of residents), and other deposits with the SBP.

On the asset side, M2 is derived from the sum of the net domestic assets and net foreign assets of the banking system, which includes both the SBP and scheduled banks.

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