Pakistan’s broad money supply, commonly referred to as M2, increased by Rs449.01 billion on a week-on-week basis to reach Rs44.39 trillion as of September 4, 2026, according to data released by the State Bank of Pakistan (SBP). M2 is the most widely used measure of broad money in Pakistan and provides an indication of the amount of money circulating through the economy and held within the banking system. The latest weekly increase comes despite a decline in the aggregate money supply compared with the level recorded at the end of June 2026.
Compared with June 2026, the country’s M2 has declined by Rs2.07 trillion from the Rs46.46 trillion recorded at the end of the previous fiscal year. The latest weekly movement therefore represents an increase within the current fiscal-year period but does not offset the decline recorded since the end of June. The data provides a breakdown of the major components contributing to the overall money supply, including currency circulating within the economy and deposits maintained with banks.
Currency in circulation increased by Rs98.58 billion during the week under review, reaching Rs11.78 trillion as of September 4, 2026. Despite the weekly increase, currency in circulation remains lower on a fiscal-year-to-date basis. The amount has declined by Rs164.55 billion compared with the Rs11.94 trillion recorded at the end of June 2026. Currency in circulation represents the balance of banknotes and coins held by the general public and financial institutions.
The share of currency in circulation within total M2 stood at 26.53% as of September 4, slightly below the 26.57% recorded a week earlier. The comparison also shows a difference from the 25.7% level cited for June 2024. The movement in this ratio reflects changes in currency holdings relative to the overall level of broad money and provides another measure of how the composition of Pakistan’s money supply is changing over time.
Deposits held with banks formed the larger component of the latest increase in M2. Total bank deposits stood at Rs32.57 trillion as of September 4, reflecting an increase of Rs347.82 billion from the previous week. However, deposits have declined by Rs1.9 trillion on a fiscal-year-to-date basis compared with their level at the end of June. The reported deposit figure excludes inter-bank deposits, government deposits and deposits belonging to foreign constituents.
In Pakistan, M2 is defined through both liability-side and asset-side measures of the banking system. From the liability side, broad money consists 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 structure captures the monetary resources available through physical currency and deposits across the financial system.
From the asset side, M2 is calculated as the combined total of net domestic assets and net foreign assets of the banking system, covering the State Bank of Pakistan and scheduled banks. This approach provides a broader view of the monetary position by linking the money supply to the assets supporting it within the banking system. The latest data shows that while M2 recorded a weekly increase of Rs449.01 billion, both currency in circulation and bank deposits remain below their respective end-June levels on a fiscal-year-to-date basis.
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