Money supply in South Korea keeps growth momentumStaff Writer | November 11, 2016
Money supply in South Korea kept a growth momentum in September on the back of record-low interest rates, central bank data showed.
Asia The M2 was 2,383 trillion won
The broad money continued to increase as the BOK cut its benchmark interest rate from 3.25 percent in July 2014 to an all-time low of 1.25 percent in June this year.
The M2 growth rate slowed from 8.3 percent in February to 6.7 percent in May, but it has stayed around 6 percent since then.
The M1, also called narrow money, jumped 12.9 percent in September compared with the previous year.
The M1 covers currency in circulation, demand deposit and transferable savings deposit equivalent to cash. The M2 adds money market fund, money trust, time deposit and financial products that mature in less than two years to M1.
Liquidity of financial institutions, called Lf, advanced 7.8 percent in September from a year ago. The on-year increase of liquidity aggregate, the broadest measure of money supply, was 7.9 percent in the month.
The Lf includes financial products with a maturity of more than two years and liquidity at insurers and brokerages along with M2. The liquidity aggregate adds state and corporate bonds to the Lf. ■