Currency in circulation rises by Rs175.8bn in a week

February 21, 2024 (MLN): The currency in circulation within the economy till February 09, 2024 has increased by Rs175.83bn WoW to Rs8.7tr, according to provisional accounts on Monetary Aggregates for the week, maintained by the State Bank of Pakistan (SBP).

While in the current fiscal year, the currency in circulation has decreased by Rs448.21bn as compared to RsRs9.15 tr recorded at the end of June 2023.

Broad money (M2), the most widely used measure of money supply in Pakistan, increased by Rs107.04bn WoW to Rs32.32tr as of February 09, 2024.

When compared to June 2023, M2 has risen by Rs796.59bn, compared to Rs31.52tr recorded by the end of the last fiscal year.

Currency in circulation as a percentage of M2 stood at 26.92% compared to 26.46% a week before and 29.02% on June 2023.

Total deposits held with banks were recorded at Rs23.5tr, depicting drop of Rs67.25bn WoW and an increase of Rs1.24tr FYTD.

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

The 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 SBP.

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

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