As of July 2023, the total money supply within the economy has been officially recorded at Rs34.25 trillion, based on provisional data from the State Bank of Pakistan (SBP) in their Monetary Aggregates report.

Comparing this figure to the money supply in June 2023, which stood at Rs34.55 trillion, we observe a month-on-month (MoM) decrease of 0.87%. However, when considering the same month, July, from the previous year when the money supply was Rs30.37 trillion, we see a year-on-year (YoY) increase of 12.75%.

Breaking down the overall money supply into specific categories, SBP data reveals that Rs8.63 trillion was circulated in the form of banknotes, while Rs17.23 trillion constituted transferable deposits. Transferable deposits include all deposits that can be readily exchanged on demand at par value without any penalties or restrictions.

Notably, the amount of currency in circulation as banknotes, which has historically been relatively high in Pakistan compared to other developed and emerging economies due to the prevalence of the informal economy, experienced a MoM decline of 5.53%. However, it has shown a robust YoY growth of 10.67%.

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