Money supply rises as currency in circulation climbs by Rs78bn

ISLAMABAD: The currency in circulation in Pakistan has seen a significant rise, according to the latest data from the State Bank of Pakistan (SBP).

Broad money (M2), which is the most commonly used measure of money supply in the country, increased by Rs141.06 billion week-on-week (WoW), reaching Rs36.06 trillion as of March 14, 2025.

When compared to June 2024, M2 has risen by Rs180.04 billion, up from Rs35.88 trillion at the close of the last fiscal year.

Breaking down the M2 components, the currency in circulation within the economy increased by Rs78.37 billion WoW, bringing the total to Rs9.84 trillion as of March 14, 2025. Since the start of the current fiscal year, currency in circulation has grown by Rs691.5 billion, compared to Rs9.15 trillion at the end of June 2024.

The share of currency in circulation as a percentage of M2 stood at 27.3 per cent, compared to 27.19 per cent a week earlier and 25.51 per cent in June 2024.

Total deposits held with banks reached Rs26.17 trillion, reflecting an increase of Rs63.6 billion WoW, but a decrease of Rs499.89 billion since the beginning of the fiscal year. It is important to note that bank deposits exclude inter-bank deposits, government deposits, and foreign constituents’ deposits.

Currency in circulation refers to the amount of banknotes and coins held by the general public and financial institutions. In Pakistan, M2 is the broadest measure of money supply and is defined from both liability and asset sides.

From the liability side, it comprises currency in circulation, total deposits of the non-government sector (including residents’ foreign currency deposits), and other deposits with the SBP. From the asset side, M2 includes net domestic assets and net foreign assets of the banking system, which consists of the SBP and scheduled banks.

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