Currency in circulation in Pakistan has surged to Rs10.967 trillion, showing nearly 19% annual growth, as the preference for cash continues despite government efforts to promote digital payments. According to fresh State Bank of Pakistan data, the rising cash stock and slow deposit growth pushed the country’s broad money supply close to Rs40 trillion.
The trend reflects long standing structural issues in Pakistan’s economy, where informality, low trust in banking channels, and high transaction costs keep cash usage dominant. Analysts say the increase in CiC, despite monetary easing, shows that liquidity is improving but cash remains the preferred medium for trade and daily transactions.
The latest figures reveal that CiC rose 1.5% month on month, while total deposits increased modestly by 0.1% to Rs28.972 trillion. Analysts note that the CiC to M2 ratio remains stuck near 28%, indicating limited progress in shifting the economy toward formal channels.
“The reliance on cash remains deeply ingrained,” one analyst commented, adding that improved digital infrastructure has yet to meaningfully dent informal cash flows.
SBP data also highlighted growing fiscal pressures as government borrowing climbed to Rs32.969 trillion from Rs28.26 trillion last year. Meanwhile, private sector borrowing fell slightly to Rs9.892 trillion amid slow credit offtake, even as economic conditions begin to stabilize.