Pakistan’s total money supply expanded to Rs46.5 trillion by the end of December 2025, according to provisional Monetary Aggregates released by the State Bank of Pakistan (SBP), reflecting sustained liquidity growth amid persistent inflationary pressures and evolving depositor behaviour. The data provides a snapshot of how money continues to circulate across the economy, offering insights into cash usage, deposit trends, and broader economic conditions.
According to the SBP figures, the money supply stood at Rs45.19 trillion in November 2025, indicating a month-on-month increase of 2.9% in December. On a year-on-year basis, the expansion is more pronounced. In December 2024, the total money supply was recorded at Rs40.21 trillion, meaning the latest figure represents a 15.64% annual increase. This steady rise underscores ongoing monetary expansion driven by inflation, government borrowing needs, and structural characteristics of the domestic economy.
A closer look at the composition of the money supply reveals that a significant portion continues to be held in cash form. Currency in circulation as notes amounted to Rs10.85 trillion in December 2025. This category recorded a 0.85% increase compared to the previous month and surged by 19.73% on a year-on-year basis. The SBP data suggests that high inflation has encouraged depositors to withdraw cash more frequently to meet day-to-day expenses, reinforcing Pakistan’s long-standing reliance on physical currency.
The elevated share of cash in circulation also reflects the scale of Pakistan’s informal economy, which traditionally operates outside documented banking channels. Compared to many emerging and developed economies, Pakistan maintains a higher preference for cash-based transactions, a trend that continues despite gradual growth in digital payments and branchless banking solutions. Inflationary pressures further amplify this behaviour, as households and businesses seek immediate liquidity to manage rising costs.
Transferable deposits formed the largest component of the money supply, totalling Rs25.16 trillion in December 2025. These deposits include all accounts that can be exchanged on demand at par without penalty or restriction, such as current accounts and certain savings deposits. The size of this segment highlights the central role of the banking system in facilitating transactions, even as cash usage remains elevated.
In addition to transferable deposits, other deposits stood at Rs6.97 trillion during the month, marking a 7% increase on a month-on-month basis. Other deposits include all claims that are not immediately transferable, whether held in national or foreign currency, and are typically represented by formal deposit instruments. The rise in this category suggests some degree of depositor confidence in locking funds into less liquid instruments, potentially in response to interest rate dynamics or limited alternative investment avenues.
Meanwhile, coins in circulation remained a negligible component of the overall money supply. In December 2025, coins in circulation amounted to Rs9.33 billion, marginally higher than Rs9.315 billion in November 2025 and Rs9.15 billion recorded in December 2024. While the increase is modest, it reflects incremental growth consistent with population expansion and transactional needs.
Taken together, the SBP’s monetary aggregates illustrate how Pakistan’s money supply continues to expand across multiple channels. The strong year-on-year growth points to inflation as a key driver, while the persistent dominance of cash highlights structural challenges related to documentation, financial inclusion, and trust in formal systems. At the same time, the growth in deposits signals that banks remain central to economic activity, even as liquidity preferences fluctuate.
For policymakers, the data reinforces the delicate balance between managing inflation, encouraging savings, and steering the economy towards greater formalisation. As Pakistan navigates fiscal adjustments and monetary tightening cycles, trends in money supply and its composition will remain a critical indicator of economic stability and household behaviour.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.