Pakistan's currency in circulation has witnessed a notable surge, rising by a whopping Rs253 billion within a single week, reaching Rs8.66 trillion by March 08, 2024.
This revelation comes from the provisional accounts on Monetary Aggregates for the week, meticulously maintained by the State Bank of Pakistan (SBP).
The surge in currency in circulation stands in stark contrast to the broader trend observed throughout the fiscal year, with a decrease of Rs485.71 billion compared to the figures recorded at the end of June 2023. This fluctuation signals dynamic shifts within the economic landscape of the country.
Furthermore, the broader measure of money supply in Pakistan, known as Broad Money (M2), experienced a decline of Rs206.59 billion during the same week, settling at Rs32.48 trillion. However, when juxtaposed with the data from June 2023, M2 showcases an increase of Rs957.18 billion, reflecting the evolving monetary dynamics of the nation.
An intriguing aspect of this surge in currency in circulation is its proportionate relationship with M2. Currently standing at 26.67%, the currency in circulation as a percentage of M2 has exhibited a noticeable rise compared to the previous week and a significant dip from June 2023, underlining the fluidity in the financial markets.
On the other hand, total deposits held with banks registered a decline of Rs468.69 billion week-on-week, reaching Rs23.69 trillion. However, the year-to-date increase of Rs1.43 trillion in total deposits signifies a broader trend of financial accumulation and diversification.
It is noteworthy that the deposits held with banks exclude inter-bank deposits, deposits of governments, and foreign constituents, providing a nuanced understanding of the banking sector's performance.
