Broad money, designated as M2 and tracked as the primary metric for total liquidity within Pakistan, experienced a week-on-week contraction of Rs497.06 billion to drop to Rs44.51 trillion as of July 10, 2026. Official monetary statistics published by the State Bank of Pakistan reveal that while the money supply adjusted downward during the specific weekly reporting window, aggregate liquidity remains on a higher trajectory over a longer horizon. When evaluated against the closing positions of June 2026, when M2 stood at Rs40.51 trillion at the conclusion of the previous fiscal period, the total stock of broad money has expanded by roughly Rs4 trillion.
A detailed breakdown of the structural components comprising M2 reveals divergent trends between physical cash usage and formal commercial bank balances. Currency in circulation across the national economy increased by Rs123.72 billion on a week-on-week basis, bringing the total volume of paper currency and coins held outside the banking system to Rs12.22 trillion. On a fiscal-year-to-date basis, cash holdings expanded by Rs1.58 trillion compared to the Rs10.63 trillion baseline registered at the close of June 2026. Driven by this rise in physical currency demand, currency in circulation as a percentage of total broad money shifted upward to 27.45 percent, compared to 26.87 percent recorded a week earlier and 26.25 percent noted in June 2024.
The weekly contraction observed in overall broad money was largely determined by a sharp drawdown in commercial banking deposits. Total deposits held across the domestic banking network fell by Rs624.56 billion week-on-week to settle at Rs32.24 trillion. These reported deposit figures specifically measure private non-governmental balances and exclude inter-bank deposits, federal or provincial government holdings, and accounts belonging to foreign constituents. Despite the short-term weekly decrease, cumulative bank deposits continue to reflect an increase of Rs2.43 trillion for the current fiscal year to date.
Within the monetary policy framework of the State Bank of Pakistan, M2 serves as the primary operational gauge for evaluating domestic liquidity conditions and inflationary pressures. Calculated from the liabilities side of the national balance sheet, broad money represents the combined sum of physical currency in circulation, total non-government deposits including resident foreign currency accounts, and other specialized private balances held directly with the central bank. Measured from the asset side of the financial system, M2 corresponds to the total net domestic assets combined with the net foreign assets of the entire banking infrastructure, encompassing the consolidated balance sheets of the State Bank of Pakistan and all licensed commercial banks operating nationwide.
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