Pakistan’s broad money supply, measured through M2, increased by Rs214.02 billion week on week to reach Rs43.95 trillion as of August 28, 2026, according to the latest data released by the State Bank of Pakistan (SBP). M2 is the most widely used measure of money supply in Pakistan and reflects the amount of money available across the economy through currency in circulation, bank deposits and other deposits with the central bank. The weekly increase represents a rise in overall broad money during the reported period, although the level remains below the amount recorded at the end of the previous fiscal year.
Compared with June 2026, broad money has declined by Rs2.51 trillion from the Rs46.46 trillion recorded at the end of the last fiscal year. The movement indicates that despite the Rs214.02 billion weekly increase, the overall level of M2 during the current fiscal year remains lower than its position at the end of June. The latest figures provide an indication of changes in liquidity across the banking system and the wider economy, with movements in currency holdings and bank deposits contributing to the overall position of broad money.
A breakdown of M2 shows that currency in circulation declined by Rs109.78 billion on a week on week basis, falling to Rs11.68 trillion as of August 28, 2026. Currency in circulation represents the value of banknotes and coins held by the general public and financial institutions. The decline recorded during the week reduced the amount of physical currency circulating within the economy. On a current fiscal year basis, currency in circulation has decreased by Rs263.14 billion compared with Rs11.94 trillion recorded at the end of June 2026.
The share of currency in circulation within total M2 also decreased during the reported period. Currency in circulation accounted for 26.57% of M2 as of August 28, compared with 26.96% one week earlier. The data also shows a figure of 25.7% for June 2024 as reported in the State Bank information. The changing proportion indicates that movements in physical currency and other components of broad money have affected the overall composition of M2 during the period under review.
Meanwhile, total deposits held with banks stood at Rs32.22 trillion as of August 28, recording an increase of Rs324.38 billion during the week. Despite the weekly increase, bank deposits have declined by Rs2.25 trillion on a fiscal year to date basis. These deposits represent an important component of broad money and include deposits of the non government sector, while the reported figure excludes inter bank deposits, government deposits and deposits belonging to foreign constituents.
The contrasting movements in currency in circulation and bank deposits contributed to the overall weekly increase in M2. While currency outside banks declined during the week, deposits held with banks increased by a larger amount, supporting the rise in broad money. These changes provide a view of how funds are distributed between physical currency and deposits within the financial system. The latest data also shows that the banking sector continues to account for a substantial portion of the money supply through deposits held by individuals and businesses.
From the liability side, M2 in Pakistan is measured as the combined value of currency in circulation, total deposits of the non government sector, including residents’ foreign currency deposits, and other deposits maintained with the State Bank of Pakistan. This approach captures the monetary liabilities held across the financial system and provides a broad measure of liquidity available to the economy.
From the asset side, M2 is calculated as the sum of net domestic assets and net foreign assets of the banking system, covering the State Bank of Pakistan and scheduled banks. This framework provides another way of assessing the factors underlying movements in broad money. The latest figures therefore offer an indication of changes taking place across Pakistan’s banking and monetary system, with the Rs214.02 billion weekly increase bringing total M2 to Rs43.95 trillion by August 28, 2026.
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