M2 rises by Rs116bn in a week

February 03, 2025 (MLN): Broad money (M2), the most widely used measure of money supply in Pakistan, rose by Rs116.15 billion WoW to Rs35.02 trillion as of January 24, 2024, data released by State Bank of Pakistan (SBP) showed.

When compared to June 2024, M2 has decreased by Rs857.21bn, compared to Rs35.88tr recorded by the end of the last fiscal year.

Breaking down the components of M2, the currency in circulation within the economy till January 24, 2024 has fallen by Rs75.6bn WoW to Rs9.3tr.

In the current fiscal year, the currency in circulation has risen by Rs147bn as compared to Rs9.15tr recorded at the end of June 2024.

Currency in circulation as a percentage of M2 stood at 26.55% compared to 26.86% a week before and 25.51% on June 2024.

Total deposits held with banks were recorded at Rs25.68tr, depicting an increase of Rs194.23bn WoW and a decrease of Rs989.46bn 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 SBP.

And from 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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