August 04, 2023 (MLN): The total money supply circulating within the economy during the FY23 has been recorded at Rs34.55 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 Rs33.14tr whereas, in the month of June of last year, the figure was Rs30.45tr. This means that the money supply has risen by 4.24% MoM while, on a year-on-year basis, it has jumped by 13.46% YoY.

Having broken down the overall money supply into broad categories, the SBP data shows that Rs9.13tr were circulated as notes while Rs17.03tr 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 20.84% 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.

Since the coalition government took the helm in April 2022, the currency circulation increased by Rs1.25tr.

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

Apart from this, other deposits constituted Rs5.12tr in June 2023, up by 5.51% MoM and 10.4% 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 remained fell to Rs8.97 billion in June 2023 compared to Rs9.11bn in the previous month and Rs8.99bn in June 2022.

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Posted on: 2023-08-04T15:56:44+05:00