The total volume of broad money, commercially known as M2 and utilized as the primary metric for money supply in Pakistan, has registered a substantial weekly increase of four hundred and twenty three point five three billion rupees. According to the latest monetary aggregates released by the State Bank of Pakistan for the week ended May twenty second, twenty daily six, this expansion has pushed the cumulative money supply in the economy to a record high of forty three point twelve trillion rupees. When measured against the closing levels of the previous fiscal period, the overall money supply has expanded by two point six one trillion rupees, up from the forty point five one trillion rupees recorded at the start of the current financial cycle.
A deeper analysis of the core components of broad money indicates that the volume of currency in circulation across the economy experienced a week on week increase of one hundred and sixty three point zero four billion rupees, reaching a total of twelve trillion rupees. Throughout the ongoing fiscal year, the amount of cash circulating outside the formal banking channels has surged by one point three seven trillion rupees when contrasted against the ten point six three trillion rupees recorded at the end of the prior fiscal period. This persistent accumulation of hard cash signifies that currency in circulation as a percentage of broad money has ticked upward to twenty seven point eight four percent, reflecting a noticeable rise from the twenty seven point seven three percent documented a week prior and the twenty six point two five percent observed during earlier comparative periods.
Simultaneously, total liquid deposits held with commercial banking institutions witnessed a healthy weekly influx of two hundred and sixty point nine two billion rupees, bringing the total deposit base to thirty one point zero seven trillion rupees. On a fiscal year to date basis, bank deposits have grown by one point two six trillion rupees, demonstrating a steady accumulation of private sector liquidity despite ongoing inflationary pressures in the domestic market. For clarity, these official banking deposit tallies strictly exclude all inter bank lending deposits, institutional funds belonging to various federal and provincial government departments, and capital reserves owned by non resident foreign constituents.
In the national context, broad money serves as the most comprehensive indicators of domestic liquidity and inflationary potential, evaluated carefully by central bank policymakers to determine the direction of monetary policy. From the accounting liability perspective, M2 is calculated as the cumulative sum of all currency in circulation, total liquid deposits belonging to the non government private sector, including foreign currency accounts held by residents, and miscellaneous deposits managed directly within the central bank. Conversely, from the asset perspective of the national balance sheet, broad money is balanced as the exact sum of net domestic assets and net foreign assets held across the entire banking system, which encompasses both the central bank and all operating scheduled commercial banks.
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