Money supply drops 0.87% MoM to Rs34.25tr as of July

September 05, 2023 (MLN):  The total money supply circulating within the economy till July 2023 has been recorded at Rs34.25 trillion, according to provisional accounts on Monetary Aggregates for the month, maintained by the State Bank of Pakistan (SBP).

The money circulating within the economy until June 2023 was Rs34.55tr whereas, in the month of July of last year, the figure was Rs30.37tr. This means that the money supply has fallen by 0.87% MoM while, on a year-on-year basis, it has jumped by 12.75% YoY.

Having broken down the overall money supply into broad categories, the SBP data shows that Rs8.63tr were circulated as notes while Rs17.23tr accounted for transferable deposits which comprise all deposits that are exchangeable on demand at par without penalty/restriction.

The currency circulated as notes which have been high in Pakistan relative to other developed and emerging economies because of the high informal economy fell by over 5.53% MoM while it is up by 10.67% over the year.

Meanwhile, it is worth mentioning that in 2018 when the PTI government came into power, the total currency in circulation in the country was approximately Rs4.3tr. From then until the beginning of the Covid period in March 2020, this figure had surged to Rs5.6tr. In May 2020, notes in circulation crossed the Rs6tr mark, and since then it has consistently stayed above that mark.

Apart from this, other deposits constituted Rs5.1tr in July 2023, down by 0.29% MoM and up 12.45% YoY.

Other deposits represent all claims other than transferable deposits in national or foreign currency that are represented by evidence of deposits.

Meanwhile, coins in circulation stood at Rs9.04 billion in July 2023 compared to Rs8.97bn in the previous month and Rs9.01bn in July 2022.

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