M2 rises by Rs317bn in a week

December 10, 2024 (MLN): Broad money (M2), the most widely used measure of money supply in Pakistan, rose by Rs316.88 billion WoW to Rs36.34 trillion as of November 29, 2024, data released by State Bank of Pakistan (SBP) showed.

When compared to June 2024, M2 has decreased by Rs215.67bn, compared to Rs36.55tr recorded by the end of the last fiscal year.

Breaking down the components of M2, the currency in circulation within the economy till November 29, 2024, has fallen by Rs109.68bn WoW to Rs9.03tr.

While in the current fiscal year, the currency in circulation has decreased by Rs118.12bn as compared to Rs9.15tr recorded at the end of June 2024.

Currency in circulation as a percentage of M2 stood at 24.86% compared to 25.39% a week before and 25.04% on June 2024.

Total deposits held with banks were recorded at Rs27.18tr, depicting an increase of Rs420.17bn WoW and a decrease of Rs85.61bn 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 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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