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Money supply averaged Rs 2,056,383.48m in last 6 years

Money supply averaged Rs 2,056,383.48m in last 6 years

ISLAMABAD: Money supply in the country has been averaged Rs 2,056,383.48 million in last six years (2008-2014), reaching all-time high of Rs 2,985,235.07 million in July this year and a record low of Rs 1,413,617.11 million in July 2008.

The source further shared data that money supply decreased to Rs 2,772,985 million in October from Rs 2,773,002.68 million in September of 2014. The money supply or money stock is the total amount of monetary assets available in an economy at a specific time. There are several ways to define “money,” but standard measures usually include currency in circulation and demand deposits (depositors’ easily accessed assets on the books of financial institutions).Public and private sector analysts have long monitored changes in money supply because of its effects on the price level inflation, the exchange rate and the business cycle.

“There is strong empirical evidence of a direct relation between money-supply growth and long-term price inflation, at least for rapid increases in the amount of money in the economy,” a well-placed source at Finance Ministry told this scribe here the other day.

The source further said that total value of currency notes in circulation in the country was Rs. 2,519 billion while total value of Re 1 and above coins in circulation in the country was Rs 7.7 billion by mid of November whereas total value of currency notes and coins in the country was Rs 2526.7 billion. The source said that in monetary economics, circulation referred to the continuing use of individual units of a currency for transactions and currency in circulation referred to the total value of currency (coins and paper currency) that had ever been issued minus the amount that had been removed from the economy by the central bank.

“More broadly, money in circulation refers to the total money supply of a country, which can be defined in various ways always including currency and also including some types of bank deposits: the source observed adding that the State Bank of Pakistan (SBP) controlled the issuance of the currency in the country.

It is interesting to note here that Reserve Bank of India from India Security Press in Nasik, and the Government of India issued provisional currency notes on behalf of government of Pakistan on April 1, 1948 without the without the possibility of redemption in India.