July 05, 2023 (MLN): The total money supply circulating within the economy during the 11MFY23 has been recorded at Rs33.14 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 April 2023 was Rs32.74tr whereas, in the month of May of last year, the figure was Rs30.45tr. This means that the money supply has inched up by 1.21% MoM while, on a year-on-year basis, it has jumped by 8.84% YoY.

Having broken down the overall money supply into broad categories, the SBP data shows that Rs8.57tr were circulated as notes while Rs16.49tr accounted for transferable deposits which comprise all deposits that are exchangeable on demand at par without penalty/restriction.

The currency circulated as notes which has been high in Pakistan relative to other developed and emerging economies because of the high informal economy rose by over 13.4% 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.

Since the coalition government took the helm in April 2022, the currency circulation increased by Rs688.27 billion.

This reflects higher cash withdrawals by depositors to meet needs amid high inflation.

Apart from this, other deposits constituted Rs4.83tr in May 2023, up by 4.56% MoM and 4.32% YoY.

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 remained relatively flat at Rs9.11bn in May 2023 compared to April 2023 and May 2022.

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Posted on: 2023-07-05T18:50:45+05:00