M2 falls by Rs455bn in a week

July 19, 2025 (MLN): Broad money (M2), the most widely used measure of money supply in Pakistan, dropped by Rs455.15 billion WoW to Rs39.57 trillion as of July 11, 2025, data released by the State Bank of Pakistan (SBP) showed.

When compared to June 2025, M2 has decreased by Rs1.48tr, compared to Rs41.05tr recorded by the end of the last fiscal year.

Breaking down the components of M2, the currency in circulation within the economy till July 11, 2025 has increased by Rs123.6bn WoW to Rs10.97tr.

While in the current fiscal year, the currency in circulation has risen by Rs337.73bn as compared to Rs10.63tr recorded at the end of June 2025.

Currency in circulation as a percentage of M2 stood at 27.73% compared to 27.11% a week before and 25.9% on June 2024.

Total deposits held with banks were recorded at Rs28.55tr, depicting a decrease of Rs574.13bn WoW and a decrease of Rs1.81tr FYTD.

To note, the deposits held with banks exclude inter-bank deposits, deposits of governments, and foreign constituents.

Currency in circulation represents the balance of banknotes and coins in circulation, held by the general public and financial institutions.

In Pakistan, M2 is the most widely used definition of broad money.

From the liability side, it is measured as a sum of currency in circulation; total deposits of the non-government sector, including residents’ foreign currency deposits; and other deposits with the SBP.

And from the asset side, M2 is the sum of net domestic assets and net foreign assets of the banking system (i.e. SBP and scheduled banks).

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