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Money supply reaches Rs28.12tr in January

March 1, 2022 (MLN): The total money supply circulating within the economy during the seventh month of FY22 has been recorded at around Rs28.12 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 December 2021 was Rs28.62tr whereas, until the corresponding month of last year, the figure was Rs25.7tr. This means that the money supply has declined by 1.74% MoM whereas, on a year-on-year basis, it has jumped by 9.4%.

Having broken down the overall money supply into broad categories, the SBP data shows that Rs7.01tr were circulated as notes while Rs13.2tr 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 rose by over Rs0.65tr or 10% over the year.

The currency circulated as notes which have been high in Pakistan relative to other developed and emerging economies because of the high informal economy rose by over Rs0.65tr or 10% 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 has surged to Rs5.6tr. In May 2020, notes in circulation crossed the Rs6tr mark, and since then it has consistently stayed above that mark.

This reflects higher cash withdrawals by depositors to meet needs amid pandemics. Moreover, Cash distributing schemes amid Covid-19 as a relief measure can also be considered as a significant contributor to the surging circulation of currency.

 

Apart from this, other deposits constituted Rs3.9tr in January 2022, up by 6% MoM and 15% MoM. Other deposits represent all claims other than transferable deposits in national or foreign currency that are represented by evidence of deposits.

Similarly, coins in circulation increased slightly by 8% YoY to Rs8.98 billion in January 2022. While, on monthly basis, it inched up by 1%.

 

Copyright Mettis Link News

Posted on: 2022-03-01T10:14:21+05:00

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