Thu, 05 Aug 2021

S.Korea's money supply keeps growing in April

Xinhua
15 Jun 2021, 16:30 GMT+10

SEOUL, June 15 (Xinhua) -- South Korea's money supply kept growing in April on a spike in stock investment with borrowed money amid the record-low policy rate, central bank data showed Tuesday.

The M2, or broad money, amounted to 3,363.7 trillion won (3 trillion U.S. dollars) in April, up 11.4 percent from the same month of last year, according to the Bank of Korea (BOK).

From a month earlier, the M2 gained 1.5 percent, marking the fastest growth in over 12 years since February 2009.

People rushed to buy stocks with borrowed money amid the record-low interest rate. The BOK has left its benchmark interest rate unchanged at an all-time low of 0.50 percent since May last year.

The M1, or narrow money, surged 24.2 percent in April from a year earlier.

The M1 refers to currency in circulation, demand deposit and transferable savings deposit equivalent to cash. The M2 adds money market fund, time deposit and financial products that mature in less than two years to M2.

The liquidity on financial institutions, called Lf, climbed 9.5 percent in the cited month. The year-over-year expansion of liquidity aggregate, the broadest measure of money supply, was 10.7 percent.

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.

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