The most widely used measure of the money supply in Pakistan, broad money (M2), dropped by Rs46.6 billion week over week (WoW) to Rs35.64 trillion as of September 6, according to the State Bank of Pakistan (SBP).
When compared to June 2024, M2 has declined by more than Rs940 billion, from Rs36.58 trillion recorded at the end of FY24.
The currency in circulation within the country increased by Rs212.71 billion WoW to Rs9.09 trillion.
However, in FY25, the currency in circulation has decreased by Rs61.11 billion, compared to Rs9.15 trillion recorded at the end of June.
According to Mettis Global, total deposits held with banks were recorded at Rs26.43 trillion, showing a weekly reduction of Rs256.21 billion.
Deposits held by banks exclude inter-bank deposits, government deposits, and foreign constituents.
For those unaware, the currency in circulation represents the balance of banknotes and coins in circulation, held by the public and all financial institutions.
Liabilities can be calculated by adding up the overall amount of money in circulation, the total amount of deposits made by non-governmental organisations (including foreign currency deposits made by citizens), and any additional deposits with the SBP.
Furthermore, M2 is the total amount of the banking system’s net foreign and net domestic assets (i.e., the SBP and scheduled banks) when considering assets.
