Pakistan’s broad money supply (M2), the most widely referenced measure of liquidity in the economy, increased by Rs722.01 billion on a week-on-week basis to reach Rs41.72 trillion as of January 30, 2026, according to the latest data released by the State Bank of Pakistan (SBP). The weekly expansion reflects continued growth in monetary aggregates amid evolving fiscal and financial conditions.
In comparison with the end of the last fiscal year in June 2025, M2 has expanded by Rs933.36 billion. At the close of June 2025, the broad money supply stood at Rs40.79 trillion, indicating a steady build-up in liquidity during the current fiscal year.
A breakdown of M2 components shows that currency in circulation within the economy rose by Rs2.8 billion week-on-week to Rs11.04 trillion as of January 30, 2026. On a fiscal year-to-date basis, currency in circulation has increased by Rs405.48 billion, compared with Rs10.63 trillion recorded at the end of June 2025. The data indicates a gradual rise in physical currency holdings alongside deposit growth.
Currency in circulation as a percentage of M2 stood at 26.46 percent, slightly lower than 26.92 percent recorded a week earlier, and above the 26.07 percent level observed in June 2024. The marginal weekly decline in the ratio suggests that deposit growth outpaced the increase in physical cash during the reporting period.
Total deposits held with banks were recorded at Rs30.63 trillion, registering a week-on-week increase of Rs718.5 billion. On a fiscal year-to-date basis, deposits have grown by Rs537.16 billion. These figures exclude inter-bank deposits, government deposits and deposits held by foreign constituents, focusing specifically on non-government sector balances.
Currency in circulation represents the stock of banknotes and coins held by the general public and financial institutions outside the central bank. The measure is closely monitored as an indicator of transactional demand and cash usage trends in the economy.
In Pakistan’s monetary framework, M2 is the primary indicator of broad money. From the liability side, it comprises currency in circulation, total deposits of the non-government sector including residents’ foreign currency deposits, and other deposits held with the SBP. From the asset side, M2 is calculated as the sum of net domestic assets and net foreign assets of the banking system, which includes both the central bank and scheduled banks.
Movements in M2 are closely tracked by policymakers and market participants as they reflect underlying liquidity conditions and can influence inflation expectations, credit expansion and overall economic activity. Changes in deposits and currency trends may also provide signals regarding savings behavior, financial intermediation and the public’s preference between holding cash and bank balances.
The latest increase in broad money underscores ongoing shifts in the banking system’s balance sheet and monetary dynamics during the fiscal year. As monetary aggregates continue to evolve, analysts will monitor how these trends align with the central bank’s broader macroeconomic objectives and monetary policy stance in the months ahead.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.