Pakistan witnesses a decline of approximately Rs. 1 trillion
in cash supply
Cash reserves in Pakistan have seen a decrease of roughly
Rs. 1 trillion during the initial three months of the financial year 2023-24,
as per the latest data from the State Bank of Pakistan (SBP).
"Almost Rs. 1 trillion fall in cash holdings in
Pakistan in the last 3 months. According to the latest numbers, CiC is down
from Rs. 9.2 trillion to Rs. 8.3 trillion in the last 3 months. CiC as a
percentage of Money Supply and year-on-year growth basis also falling,"
stated CEO of Topline Securities, Mohammed Sohail.
Pakistan
holds Rs30.96 trillion in circulation, higher than India and Bangladesh
SBP data reveals that broad money (M2) decreased by Rs. 418
billion to Rs. 31.1 trillion in 1QFY24, indicating an overall supply
contraction of 1.33 percent from Rs. 31.5 trillion at the end of FY23 (June).
The currency in circulation dropped by nearly Rs. 780
billion to Rs. 8.37 trillion in the first three months of FY24, marking an 8.5
percent decrease from Rs. 9.148 trillion, which was the total currency stock at
the end of June FY23. Meanwhile, total deposits with local banks amounted to
Rs. 22.3 trillion, with a CiC-to-bank deposit ratio of 37.5 percent.
SBP
set to launch Pakistan's first digital currency
CiC as a percentage of Money Supply (M2) is at 27 percent,
and according to trends witnessed in 1QFY24, CiC started falling after new
Budget provisions activated a standard fee on cash withdrawals by non-filers,
which probably drove people to hoard cash in banks.
The current property market slump coupled with the decline
in 'wealth for tax avoidance' has likely caused a significant dip in the net
stock of cash holdings.
Source: Pro Pakistani