Pakistan's government borrowed slightly more money last week, even as cash in public hands dropped and the country's overall money supply shrank, according to fresh central bank data released for the week ending July 24, 2026.
Currency in circulation fell 2% week on week, dropping to PKR11.91 trillion from PKR12.10 trillion. That decline helped pull down broad money, known as M2, to PKR43.57 trillion. Since the start of the fiscal year, M2 has fallen 6.2%.
Meanwhile, total government borrowing ticked up slightly, rising to PKR36.79 trillion from PKR36.71 trillion the previous week. Borrowing meant for budgetary support also grew modestly, reaching PKR35.80 trillion compared with PKR35.73 trillion a week earlier.
Breaking down the borrowing figures, the government pulled PKR1.96 trillion from the State Bank of Pakistan, a 1% weekly increase. Borrowing from scheduled banks rose too, climbing to PKR33.84 trillion from PKR33.79 trillion.
On the deposit side, scheduled bank deposits stayed largely flat at PKR31.61 trillion. Deposits held with the central bank, however, slipped 3% to PKR49 billion.
Looking at the banking system's broader balance sheet, net foreign assets dropped 6% week on week to PKR1.91 trillion, net domestic assets barely moved, holding steady at PKR41.66 trillion.
Credit extended to the non-government sector totaled PKR13.88 trillion. Within that figure, private sector credit slipped 1% week on week to PKR11.02 trillion, suggesting businesses and individuals borrowed slightly less than the week before.
Analysts pointed to seasonal patterns to explain the drop in currency circulation, noting that cash demand typically spikes at the end of June and then eases off. The small rise in government borrowing, they added, reflects Islamabad's continued reliance on domestic sources to cover its fiscal needs.
Together, the numbers paint a picture of a banking system adjusting after a busy fiscal year end, with the government still leaning on local banks and the central bank to fund its budget while everyday cash use normalizes. The data was compiled by AKD Securities using figures from the State Bank of Pakistan.
