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Money Supply surges to 17% in FY20

September 15, 2020 (MLN): Pakistan’s money supply surged to 17% in fiscal year 2020 from 10% recorded in FY19, the State Bank of Pakistan (SBP) data showed on Tuesday.

The total money supply circulating within the economy by the end of June 2020 stood at Rs.24.966 trillion compared to Rs 21.4 trillion reported at the end of June 2019.

During FY20, the M2 growth continued to hasten despite dearth of credit demand from the private sector amid slow down in economic activity, as it increased to 18% or Rs.20.53 trillion against Rs.17.46 trillion recorded by the end of FY19.

The increase in money supply can be attributable to government refinance scheme and cash distribution to poor to provide relief amid Covid-19 pandemic.

Money Supply during 1MFY21 i.e. July’20 has been recorded at around Rs.24.854 trillion, according to provisional accounts on Monetary Aggregates for the month, maintained by the SBP.

The money circulating within the economy until last month was Rs.24.96 trillion while until the corresponding month of last year, the figure was Rs.21.27 trillion. This means that money supply has increased 17% over the year in July’20 and remained stationary over the month.

Having broken down the overall money supply in broad categories, the SBP data shows that a total of Rs.6.4 trillion were circulated as notes while Rs.10.74 trillion accounted for transferable deposits which comprise all deposits that are exchangeable on demand at par without penalty/restriction.

The amount circulated as notes which has been high in Pakistan relative to other developed and emerging economies, rose by over Rs 1.25 trillion or 24% over the year during the month mentioned above.

Apart from this, other deposits constituted Rs.3.36 trillion in July’20, up by 15%, YoY. Other deposits represent all claims other than transferable deposits in national or foreign currency that are represented by evidence of deposits. Similarly, coins circulated surged from Rs.8.47 billion in July 2019 to Rs.8.58 billion in July 2020.

Furthermore, Rs.270.8 billion worth of deposits were held with post offices while National Saving Schemes held Rs.4.05 trillion, marking a growth of 12% YoY from Rs.3.62 trillion.

Copyright Mettis Link News


Posted on: 2020-09-15T16:49:00+05:00


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