S. Korea’s money supply grows for 14th month in July

SEOUL, Sept. 13 (Xinhua) — South Korea’s money supply grew for the 14th consecutive month due to solid demand for deposits and securities, central bank data showed Friday.
The seasonally-adjusted M2, or broad money, gained 0.4 percent to 4,053.9 trillion won (3.05 trillion U.S. dollars) in July compared to the previous month, continuing to rise since June 2023, according to the Bank of Korea (BOK).
The continued expansion was attributed to strong demand for short-term financial instruments such as time deposits and profit-making securities.
The M1, or narrow money, reduced 0.3 percent in July on a monthly basis, keeping a downward trend for the fourth straight month.
Expectations ran high for the BOK to lower its policy rate by the end of 2024 amid an expected rate cut in the United States.
The M1 refers to currency in circulation, demand deposits and transferable savings deposits equivalent to cash. The M2 adds money market funds, time deposits and financial products that mature in less than two years.
The liquidity of financial institutions, called Lf, increased 0.2 percent in the cited month, while the liquidity aggregate, the broadest measure of money supply, stood unchanged.
The Lf includes financial products with a maturity of over two years and liquidity at insurers and brokerages along with M2. The liquidity aggregate adds state and corporate bonds to the Lf. ■